As one of the world’s largest emerging economies, South Africa’s economy has seen significant improvements in recent decades. The economic composition of the country’s output has been changing rapidly, moving away from resource-based industries and the manufacturing sector, towards a larger service sector. In this context, the existing stock of skills and its mobilisation into the labour market represent important bottlenecks for the country’s further development. Educational attainment has increased substantially over the years but a large share of South Africans still leave the education system before finishing upper secondary education. Furthermore, South African students in secondary education perform poorly on international tests, suggesting that the quality of initial education is low. Educational outcomes are strongly dependent on socio-economic factors, with students from disadvantaged backgrounds at most risk of attending low quality schools and dropping out from secondary education. As a result of large gaps in education and labour market outcomes, South Africa has one of the highest levels of income inequality.