Working Paper
Measuring earnings inequality in South Africa using household survey and administrative tax microdata

Overall income inequality in South Africa is very high, and inequality generated in the labour market is a key driver of inequality.

In this paper, I use the Post-Apartheid Labour Market Series, the General Household Surveys, and administrative tax microdata to describe earnings inequality in South Africa. I estimate Gini coefficients, the variance of log earnings, and various percentile ratios to document changes in earnings inequality.

I show that earnings inequality estimates from the Quarterly Labour Force Surveys are unreliable, most likely as a result of the earnings imputations in the publicly available data from Statistics South Africa. I also use the tax microdata to document the contributions of within- and between-firm differences to overall earnings inequality.