Answer to Question #243973 in Microeconomics for Lwely

Question

Discuss poverty and inequality in South Africa.

Answer 1

Poverty is more prevalent among black South Africans. The main factor attributed to poverty in this country is high unemployment rates. It is also elaborate among the less educated, the unemployed, female-headed households, large families, and children. Further, poverty has a strong spatial dimension in South Africa, a demonstration of the enduring legacy of apartheid. It remains concentrated in the previously disadvantaged areas that were set aside for black South Africans along ethnic lines during apartheid. Additionally, high levels of income polarization are manifested in very high levels of chronic poverty, a few high-income earners and a relatively small middle class. Fourth, the role of skills and labour market factors have grown in importance in explaining poverty and inequality while the role of gender and race, though still important, has declined, presenting an opportunity for policy to influence poverty and inequality outcomes. Social protection remains important in reducing extreme poverty, but the fiscal space for further expansion is limited. Low growth perspectives in the coming years suggest poor prospects of eliminating poverty by 2030 as envisaged in the National Development Plan. Looking ahead, accelerating poverty and inequality reduction will require a combination of policies that seek to unlock the full potential of labour markets and promote inclusive growth through skilled job creation.