The Relationship between Globalization and Income Inequality in South Africa

The wave of globalization is having far-reaching implications for the economic wellbeing of citizens in all regions and among all income groups. Using data from 1994q1 to 2012q4, the paper investigates the relationship between globalization and income inequality in South Africa. We find no evidence that globalization might have deepened income inequality in South Africa, particularly in the provinces. Rather, the paper found strong evidence indicating that income distribution is improving, and has become more so, in provinces that have stronger links to the world economy. Strengthening those links appears to result in reductions in inequality.