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Public Policy and Extended Families: Evidence from Pensions in South Africa

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Author Info
Marianne Bertrand
Sendhil Mullainathan
Douglas Miller

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Abstract

How are resources allocated within extended families in developing economies? This question is investigated using a unique social experiment: the South African pension program. Under that program the elderly receive a cash transfer equal to roughly twice the per capita income of Africans in South Africa. The study examines how this transfer affects the labor supply of prime-age individuals living with these elderly in extended families. It finds a sharp drop in the working hours of prime-age individuals in these households when women turn 60 years old or men turn 65, the ages at which they become eligible for pensions. It also finds that the drop in labor supply is much larger when the pensioner is a woman, suggesting an imperfect pooling of resources. The allocation of resources among prime-age individuals depends strongly on their absolute age and gender as well as on their relative age. The oldest son in the household reduces his working hours more than any other prime-age household member. Copyright 2003, Oxford University Press.

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Publisher Info
Article provided by Oxford University Press in its journal The World Bank Economic Review.

Volume (Year): 17 (2003)
Issue (Month): 1 (June)
Pages: 27-50
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Handle: RePEc:oup:wbecrv:v:17:y:2003:i:1:p:27-50

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  1. Timothy Hinks, 2008. "Poverty, networks and location: the determinants of job-search in South Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(2), pages 117-131. [Downloadable!]
  2. Irineu E. Carvalho Filho, 2008. "Household Income As A Determinant of Child Labor and School Enrollment in Brazil: Evidence From A Social Security Reform," IMF Working Papers 08/241, International Monetary Fund. [Downloadable!]
  3. Dean Yang, 2004. "International Migration, Human Capital, and Entrepreneurship: Evidence from Philippine Migrants’ Exchange Rate Shocks," Working Papers 531, Research Seminar in International Economics, University of Michigan. [Downloadable!]
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  4. Farshid Vahid & Pushkar Maitra, 2005. "The Effect of Household Characteristics on Living Standards in South Africa 1993 - 98: A Quantile Regression Analysis with Sample Attrition," ANUCBE School of Economics Working Papers 2005-452, Australian National University, College of Business and Economics, School of Economics. [Downloadable!]
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  5. Dani Rodrik, 2006. "Understanding South Africa's Economic Puzzles," Working Papers id:641, esocialsciences.com. [Downloadable!]
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  6. Laura Juarez, 2007. "The Effect of an Old-Age Demogrant on the Labor Supply and Time Use of the Elderly and Non-Elderly in Mexico," Working Papers 0706, Centro de Investigacion Economica, ITAM. [Downloadable!]
  7. Cally Ardington & Anne Case & Victoria Hosegood, 2007. "Labor Supply Responses to Large Social Transfers: Longitudinal Evidence from South Africa," NBER Working Papers 13442, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Eric Edmonds & Kristin Mammen & Douglas L. Miller, 2004. "Rearranging the Family? Income Support and Elderly Living Arrangements in a Low Income Country," NBER Working Papers 10306, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Schüler, Dana, 2007. "Incentive Effects of Transfers within the Extended Family: The Case of Indonesia," Proceedings of the German Development Economics Conference, Göttingen 2007 29, Verein für Socialpolitik, Research Committee Development Economics. [Downloadable!]
  10. Dennis Görlich & Toman Omar Mahmoud & Christoph Trebesch, 2007. "Explaining Labour Market Inactivity in Migrant-Sending Families: Housework, Hammock, or Higher Education," Kiel Working Papers 1391, Kiel Institute for the World Economy. [Downloadable!]
  11. Farah Pirouz, 2005. "Have Labour Market Outcomes Affected Household Structure in South Africa? A Descriptive Analysis of Households," Working Papers 9621, University of Cape Town, Development Policy Research Unit. [Downloadable!]
  12. Katy Cornwell & Brett Inder & Pushkar Maitra & Anu Rammohan, 2005. "Household Composition and Schooling of Rural South African Children: Sibling Synergy and Migrant Effects," Monash Economics Working Papers 22/05, Monash University, Department of Economics. [Downloadable!]
  13. Kazuyasu Sakamoto, 2007. "Familial Support for Unemployed Youth," Hi-Stat Discussion Paper Series d06-201, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
  14. Marie W. Arneberg, John K. Dagsvik and Zhiyang Jia, 2002. "Labor Market Modeling Recognizing Latent Job Attributes and Opportunity Constraints An Empirical Analysis of Labor Market Behavior of Eritrean Women," Discussion Papers 331, Research Department of Statistics Norway. [Downloadable!]
  15. Rodrick, Dani, 2006. "Understanding South Africa's Economic Puzzles," Working Paper Series rwp06-039, Harvard University, John F. Kennedy School of Government. [Downloadable!]
  16. Pierre-André Chiappori & Bernard Fortin & Guy Lacroix, 2001. "Marriage Market, Divorce Legislation and Household Labor Supply," CIRANO Working Papers 2001s-16, CIRANO. [Downloadable!]
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  17. Manacorda, Marco & Moretti, Enrico, 2005. "Why Do Most Italian Young Men Live With Their Parents? Intergenerational Transfers and Household Structure," CEPR Discussion Papers 5116, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  18. Pushkar Maitra & Ranjan Ray, 2006. "Household expenditure patterns and resource pooling: evidence of changes in post-apartheid South Africa," Review of Economics of the Household, Springer, vol. 4(4), pages 325-347, December. [Downloadable!] (restricted)
  19. François Bourguignon & Martin Browning & Pierre-André Chiappori, 2006. "Efficient Intra-household Allocations and Distribution Factors: Implications and Identification," CAM Working Papers 2006-02, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics. [Downloadable!]
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  20. Alex Sienaert, 2007. "Migration, Remittances and Public Transfers: Evidence from South Africa," Economics Series Working Papers 351, University of Oxford, Department of Economics. [Downloadable!]
  21. Pushkar Maitra & Ranjan Ray, 2003. "Resource inflows and household composition: evidence from South African panel data," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(8), pages 1037-1047. [Downloadable!]
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This page was last updated on 2009-11-19.

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