Education and Socio-Economic Differentials: A Study of School Performance in the Western Cape

Not surprisingly, the education system is widely perceived to be the major tool to overcome human capital and labour market inequalities in South Africa. This paper asks how well the education system accomplishes this goal. The first part of the paper examines human capital differentials between races and provides evidence of persistent race-based educational attainment and quality differentials. It is argued that quality differentials in education may be much larger and more enduring than attainment differentials. The second part of the paper asks whether the deficiency lies in inadequate resource availability in schools of the poor or whether it rather stems from inefficiencies in parts of the school system. The paper uses national and Western Cape matriculation results and resource allocation data to examine this question and find that residuals are higher in predominantly black and coloured schools and there is no significant correlation between performance and resource allocation in this group of schools.South Africa: education system, human capital, labour market inequalities