Where does the family live?

Nadine Gordimer's short story "Once Upon a Time" has two distinct story pieces. The first part of the story is about a woman that is asked to write a children's story, but she politely declines.

Someone has written to ask me to contribute to an anthology of stories for children. I reply that I don't write children's stories; and he writes back that at a recent congress/book fair/seminar a certain novelist said every writer ought to write at least one story for children. I think of sending a postcard saying I don't accept that I "ought" to write anything.

The woman then wakes up in the middle of the night, and she decides to tell herself a bedtime story in order to get back to sleep.  

I couldn't find a position in which my mind would let go of my body release me to sleep again. So I began to tell myself a story, a bedtime story.

The rest of the story is the bedtime story that the woman tells herself. Each of the two stories within this story has its own individual setting location; however, readers are not told exactly where each story takes place.
Readers can be fairly certain that the first part of the story takes place in South Africa. The narrator tells readers that her house is built on top of a mine that is worked by Chopi and Tsonga miners.

The misbeats of my heart tailed off like the last muffled flourishes on one of the wooden xylophones made by the Chopi and Tsonga migrant miners who might have been down there, under me in the earth at that moment.

The bedtime story's location is much less specific. Readers are told that the family lives in a house within some suburb that is within a city. It is likely meant to give the bedtime story a fairy tale feel. Readers are given details that riots are occurring outside of the city where a different race lives, but without a specific time frame, race, or even continent to go by, this story could literally be set just about anywhere. 

There were riots, but these were outside the city, where people of another color were quartered. 

It is likely that the bedtime story also takes place in South Africa. The riots and violence by another race against white people would be similar to the antagonism that existed between whites and blacks in South Africa during apartheid.