Racial Segregation in South African Firms

This seminar, based on a co-authored work with Ihsaan Bassier, examines racial inequality and segregation within and between firms in post-apartheid South Africa, using newly available administrative data (Employment Equity records).

Abstract

This paper, co-authored with Ihsaan Bassier, examines racial inequality and segregation within and between firms in post-apartheid South Africa, using newly available administrative data (Employment Equity records). The data covers the near-universe of formal sector employers with 50 or more employees between 2014 and 2022. These records, which provide firm-level counts of employment, hires, separations, and promotions by occupation, race, and gender, allow a firm-level analysis of racial representation in South African for the first time. After first outlining the history of job reservation and the long-run evolution of occupational racial segregation in South Africa, we validate and place the data in context against labour force surveys and a historical occupational series from 1965. 

We then exploit its firm-level dimension to measure racial representation, job turnover, and firm-level segregation. The results show that racial transformation has progressed sequentially over time across occupational tiers, but substantial disparities remain, particularly in management, where Black African workers are significantly under-represented while White workers are highly over-represented. Despite these large representation gaps, job turnover rates are similar across racial groups conditional on occupation. Larger firms and those covered by sectoral bargaining agreements or in the public sector exhibit significantly greater racial integration in upper occupational tiers, as well as less racial segregation generally, highlighting the role of labour market institutions in shaping racial inequality within firms. We briefly explore the implications of the results for theories of racial discrimination inside private firms.

Presenter 

• Joshua Budlender (Southern Africa Labour and Development Research Unit (SALDRU), University of Cape Town)