Working Paper: CEPR ID: DP2588
Authors: Harris Selod; Yves Zenou
Abstract: We model a South African city during Apartheid (in which both schooling and mobility are restricted on the basis of race) and after Apartheid (in which no restrictions are imposed). We first show that the inequality between blacks and whites decreases when Apartheid laws are removed. Indeed, blacks are better off because of human capital externalities due to the possibility of mixing with white students whereas whites are worse off due to negative human capital externalities and intensified land market competition. After Apartheid, we also show that reducing the commuting costs of black children always increases the utility of black families and may even increase that of whites.
Keywords: apartheid; education; externalities; south africa; urban land use; urban segregation
JEL Codes: I20; J70; R14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Removal of apartheid restrictions (O17) | Decrease in inequality between blacks and whites (I24) |
| Removal of apartheid restrictions (O17) | Increased educational opportunities for black students (I24) |
| Increased educational opportunities for black students (I24) | Enhanced human capital (J24) |
| Removal of apartheid restrictions (O17) | Increased competition in the land market for whites (R21) |
| Increased competition in the land market for whites (R21) | Decreased utility for whites (J79) |
| Reduction in commuting costs for black children (R29) | Increased utility for black families (R29) |
| Reduction in commuting costs for black children (R29) | Ambiguous effect on white utility (D11) |