The Marginal Propensity to Earn and Consume out of Unearned Income: Evidence Using an Unusually Large Cash Grant Reform
AbstractWe use a rapid introduction of an unconditional cash grant (child support) in South Africa to estimate the marginal propensity to consume and earn out of unearned income. We find that the marginal propensity to earn is about â€“0.3 and the marginal propensity to consume about 0.7. Nothing of the grant appears to be saved; if anything, households dissave against future grant payments. The marginal propensities estimated here are similar to those reported in comparable papers using US data. However, they stand in contrast to some results on conditional cash transfers in other developing countries.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.
Volume (Year): 114 (2012)
Issue (Month): 4 (December)
Contact details of provider:
Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442
Other versions of this item:
- Bengtsson, Niklas, 2011. "The marginal propensity to earn and consume out of unearned income: Evidence using an unusually large cash grant reform," Working Paper Series, Center for Labor Studies, Uppsala University, Department of Economics 2011:7, Uppsala University, Department of Economics.
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jorge M. Aguero & Michael R. Carter & Ingrid Woolard, 2006.
"The Impact of Unconditional Cash Transfers on Nutrition: The South African Child Support Grant,"
SALDRU Working Papers, Southern Africa Labour and Development Research Unit, University of Cape Town
8, Southern Africa Labour and Development Research Unit, University of Cape Town.
- Jorge M. AgÃ¼ero & Michael R. Carter & Ingrid Woolard, 2007. "The Impact of Unconditional Cash Transfers on Nutrition: The South African Child Support Grant," Working Papers 39, International Policy Centre for Inclusive Growth.
- Koenker,Roger, 2005.
Cambridge University Press, number 9780521608275, 9.
- Derek Yu, 2008. "The comparability of Income and Expenditure Surveys 1995, 2000 and 2005/2006," Working Papers 11/2008, Stellenbosch University, Department of Economics.
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