Deciphering the Endowment and Price Effects of Education on Changes in Inequality in Post-Apartheid Namibia

Working Paper 2025-688

Abstract

The transition from apartheid to a democratic government in Namibia in 1990 promises equal opportunity and an overall improvement in living standards for all Namibians. However, Namibia continues to struggle with one of the highest levels of inequality in the world, currently ranked second globally in terms of inequality. Using the 1993/94, 2003/04, 2009/10, and 2015/16 waves of the Namibia Income and Expenditure Surveys, this paper examines changes in consumption inequality by deciphering the role of education in terms of both the endowment effect and the price effect over the period 1993-2016. To achieve this objective, the study employs the FFL decomposition with reweighting to analyze changes in the Gini coefficient during this period. Our findings suggest that, over the period 1993-2016, Gini consumption inequality decreases by 0.17 points. The endowment effects of secondary and tertiary education significantly reduce inequality, while the price effects of secondary and tertiary education are associated with increased inequality. Although the price effect of primary education contributes to lowering inequality, the rising returns to higher education levels exacerbate income disparities.

Authors: Ebenezer Wirba, Obrien Muine Samahiya, Esau Kaakunga .