Unconditional cash transfers and children’s educational outcomes: Evidence from the old-age pension programme in South Africa

Abstract

We use longitudinal data from three waves of South Africa's National Income Dynamics Study to estimate the effect of pension receipt in the household on children's educational outcomes in South Africa. We find that children who co-reside with a pensioner achieve better educational outcomes than those who do not, while controlling for a wide number of individual and household characteristics. In particular, we find that the sex of the pension recipient matters - the positive impact on a child’s progression through school is greater if a female, rather than a male, receives the pension.We explore some of the possible mechanisms behind this, including differential school absenteeism rates and differential spending on non-fee schooling expenses.