Inequality has a profound impact on people’s ability to accumulate skills and knowledge. The protests that rocked South Africa’s universities suggest in October 2015 suggest that the impact of inequality on the distribution of educational opportunities may have deepened so much that it now affects social cohesion.
In an era where education is an important driver of social mobility, inequality perpetuates itself in how skills and knowledge are accumulated.
As a person climbs the education ladder, differences in income will become as much about the type of training they acquired as about the number of years spent in school. This means that, to understand inequality, one needs a good grasp of factors influencing the allocation of skills and knowledge. This is particularly true of the middle part of the income distribution.
When a country is as unequal as South Africa, the people who have access to higher education – and the disciplines they choose to study – are likely to have a major effect on the society. The impact of these choices has the power to shape the composition of the society. This includes its elites and the nature of its middle class.
I examined the factors behind the choices university students made about which subject they would major in. There were two reasons for this:
In an era of increasing specialisations and rising wage differentials, not all qualifications are created equal, and
Race has both direct and indirect effects on a person’s choice of university major. Directly, it embodies the differentials in intergenerational opportunities. In this way it affects the responsiveness of applicants to academic and market information about potential earnings associated with each major.
Indirectly, it influences the choice of university major through the distribution of pre-university educational opportunities and role models across segregated geographical spaces.
Understanding the effects of racial inequalities on these choices remains a key part of South Africa’s challenge to transform its middle class.
Understanding the landscape
I set out to answer two questions:
How is the ability of groups to choose majors that will earn them more money when they graduate affected by the education they were given at school, and by role models?
How does spatial inequality inﬂuence the choices students make when selecting the subject they will major in? Here I looked at specific neighbourhoods and high schools.
I exploited the extensive information in the admissions database of the University of Cape Town (UCT) between 2010 and 2013. I also used data from the national Quarterly Labour Force Survey.
That UCT is the best-ranked higher education institution in Africa allowed me to put the analysis in the context of elite formation in a society that is undergoing social and political transformation.
This approach enabled me to establish a link between educational choices at earlier stages in life and the choice of a university major. To the extent that pre-university educational opportunities are determined by where people live, it was possible to draw a connection between spatial inequality and the choices that students made.
Where students grew up made a difference
Spatial inequality can inﬂuence an individual’s decisions at university in several ways. This includes the quality of schools in a given geographical area, the inﬂuence of role models and the effect of relative achievement in different schools. Individuals are constrained by all or some of these background factors as they optimise expected lifetime earnings from the major they choose.
The most significant determinant of what major was chosen by a student at UCT was the number of science courses they took in high school. But the choice of high school curriculum is often dictated by which of South Africa’s 242 municipalities a student lives in. This indicates the relevance of regional inequality.
Evidence suggests that the choice of major is depends very much on high school preparation. More accurately, the choice of high school curriculum is often made in anticipation of a certain university major and career path. A big part of the decision is already made in high school.
Political capital is also a major determinant in the inequality equation. To measure political capital I used a proxy – an indicator variable for black applicants from middle class households who come from municipalities electorally dominated by the governing party, the African National Congress.
Those individuals who were likely to have significant political capital tended to choose majors in commerce and the humanities.
The impact on political and economic change
My key finding was that white applicants are on average 1.8 times more responsive to changes in the signals of what they are likely to earn than black applicants.
I believe the dynamics of choosing a major at an institution like UCT are likely to have signiﬁcant long term implications for economic and political transformation. This is because it will affect the composition of elites who will be spearheading the process.
Innovation at the top of the socioeconomic pyramid will be hampered if persistent inequality leads to talent being allocated ineﬃciently on a persistent basis.
The gravitation of children of the political elites towards less technical majors may also deprive the political class of suﬃcient interest in productive activities. These require scientific knowledge and technical skills. If the political class does not have a sufficient stake in skills investment in the productive sectors it will be less inclined to promote capital investment in them.
This, in turn, is likely to leave the elites with little incentive to respect property rights, as I have shown in another study. Basically, the elites will be tempted to expropriate capital in sectors in which their children are not employed.
Policies to improve the availability of science education at high schools, or account for the eﬀect of role models in university admissions, may go a long way in affecting economic development.