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Citation Information

Type Working Paper - Southern Africa Labour and Development Research Unit
Title Identfying pure-income effects in an empirical model of labour supply: The case of the South African social pension
Author(s)
Issue 19
Publication (Day/Month/Year) 2008
Page numbers 1-27
URL https://www.saldru.uct.ac.za/images/pdf/Pure income effects.pdf
Abstract
This paper investigates the income effects of the South African Social Pension. Using data from three waves of the the Labour Force Survey, we find that there appears to be a significant negative association between labour supply and pension receipt. However, we find little evidence to support the view that these results can be interpreted as pure income effects. Rather, the evidence suggests that the association is driven by age-cohort effects, which we argue reflects the burden of living with the elderly. We also report preliminary evidence which is suggestive of endogenous household formation in response to eligibility for the social pension.

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