Trends, inequalities, and tertiary progression in educational attainment in South Africa, 2012 – 2017: evidence from nids

Abstract

In a country where inequality remains deeply rooted in both education and income, understanding the economic value of higher education is critical. This thesis estimates the private returns to higher education in South Africa and explores how they differ depending on the employment sector, gender and race. The analysis models wages using a Mincer-type function, with the natural log of income as the dependent variable, using the National Income Dynamics Study (NIDS) panel (Waves 3–5). Estimating using Ordinary Least Squares (OLS) is done with proper weighting and labor-market and demographic controls. Grounded in the Human Capital Theory, this study builds on existing research by examining how economic returns to education interact with South Africa’s entrenched social and labor market inequalities. Although earlier research has demonstrated that education has positive returns, few studies have used a nationally representative panel to break down these benefits by race, gender, and work sector. The study represents the complicated demographic dynamics influencing South Africa's post-apartheid economy and captures a more inclusive perspective of the labor force by including those who live in the country but were not born there. According to the results, while an increase in years of education significantly increase personal income, the size of these increases varies by group level. When compared to men and traditionally privileged groups, women and historically underrepresented racial groups regularly have lower income returns. The results show that despite the fact that education still has a lot to offer economically, its ability to promote equality is limited by enduring racial and gendered disparities. Policies that increase fair access to high-quality tertiary education are essential for strengthening education's role in fostering inclusive growth, as are initiatives to improve employment prospects for women and underrepresented groups.