Foreword
outh Africa’s apartheid system ended in 1994. This monumental event stopped legally sanctioned racial segregation but left the country with one of the highest rates of income inequality of any nation in the world. This research monograph investigates how to develop human capital—through the education system and other avenues—to bring income equality to South Africa by preparing low-income groups to better contribute to economic growth. This study by Futoshi Yamauchi investigates influences on human capital investment, the most prominent of which is the state of South African edu- cation. By examining education policies and household behavior, Yamauchi arrives at two major findings. First, access to quality education is still unequal across different segments of the society. Black Africans continue to have lower-quality schooling than other racial groups. For this reason, providing subsidies to black African households and predominantly black African schools to relieve financial constraints is an urgent priority.
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Second, although education is at the center of human capital formation, such formation must go beyond the classroom. To guarantee the outcomes expected from the government’s efforts to develop public-school education, building human capital must start in early childhood—indeed, even before birth. South Africa needs policy interventions aimed at enhancing healthy child growth, such as the current child support grants. Another obstacle to public education improvements and human capital development is the HIV/AIDS epi- demic. For many adolescents, educational progress stalls when HIV-infected parents cannot work, forcing students to leave school and enter the labor mar- ket to support their families. The government should provide these households with support, thereby protecting children from negative impacts that may affect human capital development.
The formation of human capital will take time, but it is a more politically feasible method of promoting income equality than direct asset redistribution from the white African minority to the black African majority. Human capital formation can also be a longer-lasting and more sustainable way to promote income equality and overall economic growth. Investing in the human capital of a disadvantaged group builds new assets for that group, expanding the possibilities for South Africans struggling to emerge from the shadow of apart- heid and for the country as a whole.
Shenggen Fan Director General, International Food Policy Research Institute viii
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