Credit Constraints and the Racial Gap in Post-Secondary Education in South Africa

This paper analyzes the impact of baseline household income and scholastic ability on post-secondary enrollment in South Africa. Using longitudinal data from the Cape Area Panel Study (CAPS), we analyze the large racial gaps in the proportion of high school graduates who enroll in post-secondary education. Our results indicate that baseline income and ability (measured in CAPS¿ literacy and numeracy evaluation) are strong predictors of post-secondary enrollment and statistically account for all of the black-white difference in enrollment.