Significant income and economic inequalities still persist in South Africa more than two decades since the fall of apartheid, yet much remains unknown about its underlying determinants. This paper is the first to use all available years of South African Income and Expenditure Surveys (IES 1995, IES 2000, IES 2005, and IES 2010) to investigate empirically the dynamics and causes of household income inequality in post- apartheid South Africa. It broadens the understanding of household income inequality by couching the analysis within a coherent multiple regression framework which extends naturally into a decomposition analysis of the racial household income differential. After adjusting the various IES’s for comparability, the study confirms that, overall, inequality in South Africa has increased since apartheid with intra-group inequality rising for key socio-demographic groups. The regression results reveal the entrenched and structural nature of the inequality along with interesting dynamic convergence patterns in geographical income inequalities; the latter finding having not so far been reported in the previous literature. The decomposition analysis confirms the importance of education and skills in overcoming the stark racial inequalities while highlighting an even more important need for much deeper institutional reforms.

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