THE ANALYSIS OF THE MAIN FACTORS INFLUENCING INCOME INEQUALITY: A CASE OF SOUTH AFRICA
Keywords:
Income inequality, South Africa, Gini coefficient, Inflation, Unemployment, Education, Government expenditure, Economic growth, Income distribution, Econometric analysis.Abstract
This study investigates the main determinants of income inequality in South Africa over the period 1970–2020. Despite sustained economic growth since the end of apartheid, South Africa remains one of the most unequal countries in the world, with a Gini coefficient of approximately 63%. Using an econometric approach, the study examines the effects of inflation, literacy, unemployment, education, government expenditure, government debt, taxes, and population growth on income distribution. The empirical findings reveal that inflation, literacy, unemployment, education, and government expenditure are statistically significant determinants of income inequality. Among these factors, educational attainment has the strongest impact on increasing income disparity, while higher government expenditure contributes to reducing inequality. In contrast, government debt, taxes, and population growth are found to have no significant effect. The results highlight the importance of targeted economic and social policies aimed at addressing structural inequalities and promoting inclusive growth in South Africa.
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