Household responses to the cessation of grant income: The case of South Africa’s Old Age Pension

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dc.contributor.author Ranchhod, Vimal
dc.date.accessioned 2017-10-13T13:43:56Z
dc.date.available 2017-10-13T13:43:56Z
dc.date.issued 2017-10
dc.identifier.citation Ranchhod, V. (2017). Household responses to the cessation of grant income: The case of South Africa’s Old Age Pension. Cape Town: SALDRU, UCT. (SALDRU Working Paper Number 213)
dc.identifier.isbn 978-1-928281-74-0
dc.identifier.uri http://hdl.handle.net/11090/897
dc.description.abstract How do poor households respond to the cessation of cash transfers in developing countries? South Africa’s generous social pension system results in most of the poor elderly being the primary ‘breadwinner’ in the household. We extract a longitudinal dataset using the rotating panel component of the nationally representative Quarterly Labour Force Surveys, and use fixed effects regression models to estimate the magnitude of changes in household composition and employment that coincide with the departure of a pensioner from the household. We find statistically significant changes in both of these outcome measures. Compositional changes include a decrease in the number of school going aged children, the number of teenagers, and the number of young adults; while the number of older adults increases. We also find significant increases in the number of employed prime aged adults and older adults. The combination of compositional changes and employment changes results in an increase in the mean proportion employed in all of the working age adult groups that we investigate. Overall, households respond by decreasing the number of dependents, increasing the number of potential caregivers, and increasing the proportion of adults engaged in income generating activities. en_US
dc.description.sponsorship Ranchhod acknowledges funding from the REDI3x3 project for this paper, and from the NRF RCA Fellowship more generally. Ranchhod greatly appreciates the assistance provided by Monet Durieux from StatsSA in providing him with the link files required to extract the panel from the repeated cross-sections. The financial assistance of the Research Project on Employment, Income Distribution and Inclusive Growth (REDI3x3) is acknowledged. Findings, opinions and conclusions are those of the author and are not to be attributed to said research Project, its affiliated institutions or its sponsors. This research report was first published in September 2017 as Working Paper 40 of the Research Project on Employment, Income Distribution and Inclusive Growth (REDI3x3), funded by the South African National Treasury and based at SALDRU, University of Cape Town: www.redi3x3.org en_US
dc.language.iso en en_US
dc.relation.ispartofseries Saldru Working Paper;213
dc.title Household responses to the cessation of grant income: The case of South Africa’s Old Age Pension en_US
dc.type Working Paper en_US


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