Engagement on on Str Strategie ies to to Overcome In Inequali lity in in So South Afr frica 1-2 Ju June e 2017, Pret retoria, Sou outh Afr fric ica SESSION 5: PROMOTING SOCIAL MOBILITY Occupational segregation, poverty and race Carlos Gradín
Background papers: • Race and Income Distribution: Evidence from the USA, Brazil and South Africa, Review of Development Economics , 2014. • Race, Poverty, and Deprivation in South Africa, Journal of African Economies , 2013. • Poverty and Ethnicity among Black South Africans, European Journal of Development Research , 2015. • Occupational Segregation by Race in South Africa after Apartheid, WIDER WP 2017/73. • Occupational Gender Segregation in Post-apartheid South Africa, WIDER (work in progress). 2
Index • The legacy of apartheid: introduction • Racial inequalities in: – Living conditions: Income, poverty and material deprivation – Education – Labor market outcomes: • Employment, Earnings • Occupations • Concluding remarks 3
The legacy of apartheid • Institutionalized racial segregation: – An ideology, discriminatory legislation , and a set of practices seeking to implement and legitimize social difference and economic inequality (Beinart and Dubow, 1995). • Ultimate purpose: to force non-whites to provide seasonal, cheap, and abundant labor for farms, mines, and other sectors, while depriving them from access to education, economic and political resources. – Core elements: • The ‘ colour bar’ : job reservation for whites that excluded blacks from skilled/semi-skilled jobs. • Large-scale oscillating labor migration . 4
The legacy of apartheid (cont.) • The result : large inequalities by population group in living conditions and education, or a labor market strongly segregated and stratified by race. • The construction of a new deracialized South Africa following 1994 general elections. – Formal dismantlement of the remaining segregative legislation. – Implementation of anti-discriminatory affirmative policies (i.e. Labour Relations Act, Employment Equity Act, Promotion of Equality and Prevention of Unfair Discrimination Act, Black Economic Empowerment, … ). • Deeply rooted inequalities along racial lines, however, proved more difficult to remove. – Especially in the context of a sluggish economy, the result of the shrinkage of the non-mineral tradable sector from the early 1990s on (Rodrik, 2008), with a chronically high level of unemployment . 5
Large racial inequalities in living conditions (income) Source: STATS SA (2017), Living Conditions of Households in South Africa, LCS 2014/15 6
Large racial inequalities in living conditions (income) Gradín (2014) 7
Large racial inequalities in living conditions (income) Absolute White-(African & Coloured) raw income differential (income relative to country´s median) Gradín (2014) 8
Relative (white- (African & Coloured) )/white income differential (income relative to country´s median) Gradín (2014) 9
Large racial inequalities in living conditions (income poverty) Gap in poverty rates between black Africans and whites Source: Gradín (2013) using PSLSD 1993, and NIDS 2008 Poverty rate Poverty rate Gradín (2014): PL=60% median income Family background US: 24 pp (65% explained), 13 pp (24%) Brazil: 19 pp (75% explained), South Africa : 31 pp (83% explained).
Large racial inequalities in living conditions (material deprivation) Source: Gradín (2013) using NIDS 2008 11
Large ethnic inequalities in living conditions (income poverty) Source: Gradín (2015) using NIDS 2008 12
Large racial inequalities in education • Double gap in years of schooling and educational achievement. – Large but declining gap in attained education with whites having levels comparable with those of developed countries and Africans being closer to the developing world. (Chisholm, 2004). – Gap in quality , starting at primary schools, with South African schools generally performing worse than neighbor countries despite their larger amount of resources (van der Berg, 2007). • Lower intergenerational education mobility of blacks (Nimubona and Vencatachellum, 2007). 13
Large racial inequalities in labor market outcomes: employment and earnings • Employment gap (e.g. Kingdon and Knight, 2004; Rospabé, 2002; Brokes and Hinks, 2004). – Unemployment rapidly increased, especially among blacks, during the 1990s and 2000s, when the economy was unable to absorb the growing supply of semi-skilled labor (e.g. Kingdon and Knight 2007; Banerjee et al. 2008). • Exacerbated by skill-biased technical change (e.g. Banerjee et al. 2008) in a context of labor market inflexibility and a small informal sector (e.g. Kingdon and Knight 2007). – Large employment gap by race largely (but not entirely) explained by the characteristics of workers from each group (Kingdon and Knight, 2004; Rospabé, 2002). – While changes in the characteristics of black South African men after apartheid have made them more employable over time, their propensity to be employed has declined (Wittenberg, 2007) • Earnings gap (e.g. Allanson et al., 2000, 2002; Burger et al., 2016; Keswell, 2010; Rospabé, 2002). – Large and declining, with increasing importance of differences in the returns to education. 14
Large racial inequalities in labor market outcomes: occupational segregation and stratification • Segregation and stratification in occupations – Occupational attainment: important gap and increasing unexplained component (e.g. Treiman et al., 1996; Rospabé, 2002; Treiman, 2007; Keswell et al., 2013). – Higher presence of blacks in more skilled occupations (along with their improved education) has contributed to reducing the racial poverty gap (Gradín, 2013). But is the labor market becoming less segregated and stratified by race ? – No strong evidence of a sustained or significant decline in occupational segregation or stratification (Gradín, 2017a). – Interplay in segregation/stratification between race and gender (Gradín, 2017b). 15
Source: Gradín (2017b) using PALMS Managers Women Men Professionals and Technicians Women Men 16
Source: Gradín (2017b) using IPUMS Managers Women Men Professionals and Technicians Women Men 17
Elementary occupations Source: Gradín (2017b) Women Men Labor Force Surveys (PALMS) Women Men Census and CS 18
White-Black segregation (Gini, Dissimilarity D) and concentration (GiniC, DC) indices Segregation Segregation of blacks into low-paying occupations IPUMS-I: 1996 and 2001 censuses; 2007 CS Labor Force surveys (PALMS) Source: Gradín (2017a) using IPUMS and PALMS 19
Decomposition of segregation and concentration Gini 2007 Segregation % observed Concentration % observed Observed 0.599 100 0.567 Unexplained 0.424 70.8 0.292 51.4 Explained (total) 0.175 29.2 0.276 48.6 Location 0.021 3.6 0.005 0.9 Education 0.155 25.9 0.247 43.5 −0.003 −0.6 Demographics 0.023 4.0 Immigration 0.002 0.3 0.001 0.1 Source: Gradín (2017a) using IPUMS Using PALMS 2015: Segregation 31% Concentration 56% 20
Decomposition of segregation and concentration Gini 1996 Segregation % observed Concentration % observed Observed 0.672 100 0.606 Unexplained 0.490 72.9 0.242 39.9 Explained (total) 0.182 27.1 0.364 60.1 −2.3 Location 0.015 2.2 -0.014 Education 0.169 25.2 0.373 61.6 −0.001 −0.2 Demographics 0.005 0.9 −0.1 Immigration 0.000 0.0 0.000 2001 Observed 0.685 100 0.641 Unexplained 0.501 73.1 0.342 53.3 Explained (total) 0.184 26.9 0.299 46.7 −0.006 −1.0 Location 0.019 2.8 Education 0.168 24.5 0.293 45.7 −0.003 −0.5 Demographics 0.013 2.0 Immigration 0.001 0.1 0.000 0.0 Source: Gradín (2017a) using IPUMS 21
Unexplained segregation (Gini and D) and concentration (GiniC and DC) indices Black and white worker with similar characteristics Source: Gradín (2017a) using IPUMS and PALMS 22
Concluding remarks • Racial discrimination produced a society strongly segregated and stratified by race with inequality in: – characteristics (location, demographic, education). – labor market outcomes, and living conditions. • Evidence of improvements in absolute terms (e.g. reduction in poverty among black Africans, access to more skilled jobs) but racial relative inequalities are quite persistent. • Racial inequality starts in the accumulation of human capital , continues in the access to employment , segregation of jobs and earnings inequality. • No strong evidence of a decline in the racial segregation/stratification of occupations – Blacks and whites work in different occupations, with an over-representation of the former in the lowest- Ex. Among 90 studies on ‘correspondence experiments’ since 2005, none in Africa ( Baert, 2017) paying jobs (it may be worse public versus private, establishment, jobs … ). – A third of segregation, a half of stratification explained inequality the distribution of worker’s characteristics (e.g. education), but a large share remains unexplained. • Need to better understand the mechanisms that explain this persistency. 23
Thank you for your attention!! 24
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