In this paper, we contend that local segregation should be an essential component of the analyzes of the determination of socio-ethnic income gaps. For this, we adopt a thorough distribution decomposition approach, as a general preliminary descriptive step to prospective speci?c structural analyses. Focusing on the contemporary White/African gap in South Africa, we ?rst complete Mincer wage equations with an Isolation index that re?ects the level of segregation in the local area where individuals dwell. Second, we decompose the income gap distribution into detailed composition and structure components. Third, we explore the heterogeneity of segregation e?ects on wage gaps along three theoretical lines: racial preferences, labor market segmentation, and networks links. Segregation is found to be the main contributor of the structure e?ect, ahead of education and experience, and to make a sizable contribution to the composition e?ect. Moreover, segregation is harmful at the bottom of the African income distribution, notably in relation to local informal job-search networks, while it is bene?cial at the top of the White income distribution. Only minor in?uences of racial preferences and labor market segmentation are found. Speci?c subpopulations are identi?ed that su?er and bene?t most from segregation, including for the former, little educated workers in agriculture and mining, often female, immersed in their personal networks. Finally, minimum wage policies are found likely to attenuate most segregation’s noxious mechanisms.