Racial segregation in South Africa firms

This paper 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 provide firm-level counts of employment, hires, separations, and promotions by occupation, race, and gender, allowing a firm-level analysis of racial representation in South Africa for the first time. We first validate and place the data in context against the long-run evolution of occupational racial segregation, using current and historical series from 1965. We then exploit its firm-level dimension to measure racial representation, job turnover, and firm-level segregation. We document that racial transformation has progressed sequentially over time across occupational tiers, but that substantial disparities remain, particularly in management, where Black African workers are significantly under-represented while White workers are highly over-represented. The post-2000 convergence we do see is driven by differential employment and population growth of Black Africans. Surprisingly, average relative group positions of the formally employed show no tendency to convergence. 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. We briefly explore implications of the results for theories of racial discrimination inside private firms.