Can Digitalization Bridge the Gap? Exploring Human Development and Inequality in Gauteng Province, South Africa?

ABSTRACT Despite global progress in reducing inequality, disparities persist and worsen in certain regions. While wealthier countries experience unprecedented human development, poorer nations, including South Africa, struggle. Digital innovations have transformed sectors like business, education, healthcare, and finance, yet the gap in digital access mirrors the gap in development. This study focuses on Gauteng Province, South Africa, a region highly prone to inequality. Using data from 1993 to 2022 and applying the Method of Moments Quantile Regression (MMQR), the study reveals that digitalization significantly reduces inequality across Gauteng's regions. The Human Development Index (HDI) is negatively correlated with inequality, showing that improvements in human development help narrow disparities. However, regional output disparities intensify inequality, with the impact growing from lower to higher quantiles. These findings underscore the dual role of digitalization as both a means of reducing inequality and a marker of deeper economic and social divides. Given the limited research on digitalization and inequality in developing economies, particularly in South Africa, this study offers critical insights and policy implications for fostering inclusive growth in the region.