Impact of Macroeconomic, Institutional and Structural Factors on Inequality in South Africa

Income inequality especially remains high in South Africa. This article investigates the impact of macro-economic, institutional and structural factors on inequality across the nine provinces of South Africa. Using a panel data econometric technique, the determinants/ drivers of inequalities are estimated. The rate of openness (globalization) of an economy, the level of financial inclusion, the status of physical infrastructure, governance indicators, and socioeconomic and institutional factors are explored as explanatory variables. The article concludes with a presentation of the challenges and policy options required to address social and economic inequalities in South Africa.