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Citation Information

Type Thesis or Dissertation - PhD thesis
Title The impact of cash transfers on labor force participation and household consumption: Evidence from Post-Apartheid South Africa
Author(s)
Publication (Day/Month/Year) 2016
URL http://uknowledge.uky.edu/cgi/viewcontent.cgi?article=1024&context=economics_etds
Abstract
The Old Age Pension (OAP) program for elderly South Africans puts a significant cash transfer in the hands of many poor households. This dissertation investigates its impact on labor force participation and consumption of selected household items. In the first half of the dissertation, we take advantage of a policy reform that lowered men's OAP eligibility age from 65 to 60 for men to match that of women for estimation identification. Using the General Household Survey data, we first demonstrate that both men and women respond to the eligibility age by dropping from labor force participation at the eligibility age, as expected. Using a difference-in-difference-in-difference estimator, we estimate that at the median predicted wage, age eligibility reduces men's probability of labor force participation by approximately 6.14 percentage points. Previous studies show that not only is the OAP take-up rate high among the age-eligible, but its value is sufficiently high to generally make it a significant component of total household income for the majority of pensioners and their households. Other studies add that it is a dominant source of income in older households, such that it is often the sole source of income in these households, especially those in rural areas. In the second half of the dissertation, therefore, we examine the impact of age-eligibility status on a number of selected household outcomes, such as food security, sanitation, source of drinking water, and ownership of consumer durable goods. We also examine the extent to which gender influences its impact on household outcomes. We find positive effects on a select number of outcomes; however, we note this is more associated with females' age-eligibility status, but not that of males.

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Copyright DataFirst, University of Cape Town