Moved to Poverty? A Legacy of the Apartheid Experiment in South Africa

Abstract

During the South African apartheid, Black people were forced to move to homelands during the 1960s and 1970s, resulting in one of history’s largest segregation policy experiments. We examine how and why relocation to the homelands affected human capital attainment. Exploiting the staggered timing of homeland establishment in a cross-cohort identification strategy, we find that moving to the home-lands during childhood significantly reduces educational attainment, labor earnings, and employment rates in adulthood. The data suggest an important role for place effects. Moving to the homelands in childhood implies greater exposure to poorer neighborhoods, and it disproportionally reduces human capital attainment. (JEL I26, J15, J24, J31, N37, O15, R23)