Perceived and Tolerated Inequality in South Africa

Twenty-five years after the apartheid regime, South Africa still battles with very high inequality. The country is regarded as one of the most unequal country in the world. The persistent high-income inequality triggers a huge concern about growth inclusivity as well as sustainability. Thus, as the persistent rise in inequality became the centre of recent economic and social research so did the tolerance of inequality. That is, over the years there have been lingering questions about inequality which remain unanswered. One of such questions is the exact relationship between perceived inequality and tolerance of inequality. This paper investigates the effect of perceived inequality on tolerance for inequality in South Africa. While a growing number of studies on actual-tolerated inequality nexus point to a positive relationship, others have observed neutral impacts of inequality on tolerated inequality. Further studies have revealed that, although people tend to reject inequality, the tolerance rate tends to be more in countries with a higher rate of inequality. However, other studies point to a feedback relationship between tolerated inequality and actual inequality. Thus, the relationship between perceived and tolerance of inequality has remained inconclusive. Using the International Social Survey Programme (ISSP) 2009, we investigate the relationship between perceived (measured by actual individual earnings) and tolerated inequality in South Africa. The results provide evidence, which suggests that perceived inequality is positively associated with tolerated inequality in South Africa. This suggests that awareness of prevalence of inequality in society will cause individuals to be unresponsive to more inequality. Our findings hold across a robust battery of robustness checks, including alternative measures of inequality, different samples, and inclusion of appropriate covariates. The results further showed that income influences individual's disposition to inequality tolerance. On education, South Africans tolerate more inequality as they climb higher on the educational ladder. On the location, it emerged that the acceptance of inequality tolerance is not location specific as all locations in South Africa are having strong feeling of delight toward inequality tolerance. Therefore, to help reduce all forms of inequality, we recommend for changes in the distribution of power, assets, access to education and health, employment opportunities at all levels.