Returns to Race: Labour Market Discrimination in Post-Apartheid South Africa
Stellenbosch Working Paper Series No. WP04/2006Publication date: 2006
Author(s):
[protected email address] (Department of Economics, Stellenbosch University)
This paper empirically assesses the impact of post-1994 policy making on racial discrimination in the South African labour market. The post-apartheid government has implemented a series of remedial measures, including an ambitious set of black empowerment and affirmative action policies. The first part of the paper gives an overview of the South African labour market post-1994 and the most important legislation, regulations and other measures aimed at redressing the inequalities of the past. We then argue that some assessment of whether the aims of these measures are being achieved is necessary. The empirical part of the paper employs the decomposition techniques of Oaxaca (1973) and Blinder (1973), Brown, Moon and Zoloth (1980) and Juhn, Murphy and Pierce (1991, 1993) to analyse three stages of the employment process: employment, occupational attainment and wage determination. Fifteen nationally representative household surveys are used to compare the evolution of discriminatory hiring and remuneration practices between 1995 and 2004 and across population groups. The results suggest that affirmative action policies have had no observable effect on the racial employment gap, and its impact on the wage distribution is limited to a small narrowing of wages at the top of the wage distribution. There appears to have been a shift away from “pure discrimination” and towards differential returns to education, which is consistent with an increasingly important role for the quality of education in labour market outcomes.
JEL Classification:j31, j71
Keywords:growth, Discrimination, South Africa
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Monday 21 July 202512:00-13:00
Izak Odendaal: Old Mutual Wealth Chief Investment Strategist
Topic: "Diverging fiscal policies and what it means for markets"
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Dr Neil Rankin: Ceo Of Predictive Insights & Stellenbosch University
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Prof Willem Boshoff: Stellenbosch University
Topic: "Two competing approaches in South African competition policy: merger control and anti-cartel enforcement over the past 30 years"
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4 Jul 2025 One Big Beautiful Bill Act passes as tariff pause deadline loomsThis week brought a flurry of data releases alongside a heavy dose of political drama, both locally and globally. Yesterday’s stronger-than-expected US jobs report was the standout global data release. Domestically, tensions persisted in the DA-ANC relationship. On the international stage, headlines were dominated by the passage of the One Big Beautiful...
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