Income Inequality in South Africa: evidence from individual-level administrative data

Abstract

We use individual-level tax administrative data to estimate income inequality for formal sector income earners in South Africa. The tax data offers better coverage of the top end of the distribution, allowing us to track changes in the income shares and sources of income for top income groups over time. We exploit the longitudinal nature of the tax administrative data to examine income mobility across the distribution, particularly the top income groups. Our results indicate that income inequality for formal sector earners in South Africa remained stable from 2011 to 2018. We also find that mobility for formal sector earners is low, particularly at the top end.

Researchers

Chandré Jacobs

Institution: University of Cape Town

Email: JCBCHA015@myuct.ac.za

Amina Ebrahim

Institution: UNU-WIDER

Email: Ebrahim@wider.unu.edu

Murray Leibbrandt

Institution: University of Cape Town and SALDRU

Email: murray.leibbrandt@uct.ac.za

Jukka Pirttilä

Institution: University of Helsinki, VATT Institute for Economics, and UNU-WIDER

Email: jukka.pirttila@helsinki.fi

Marlies Piek

Institution: UNU-WIDER

Email: Piek@wider.unu.edu