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Labor supply responses to large social transfers: Longitudinal evidence from South Africa

Author

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  • Cally Ardington

    (SALDRU, School of Economics, University of Cape TownAuthor-Email:)

  • Anne Case
  • Victoria Hosegood

Abstract

In many parts of the developing world, rural areas exhibit high rates of unemployment and underemployment. Understanding what prevents people living in rural areas from migrating to find better jobs is central to the development process. This issue is especially salient in South Africa, where differences in earnings and employment rates between rural and urban areas are large and persistent (Chamberlain and van der Berg 2002; Leite et al. 2006; Banerjee et al. 2007). In this paper, we examine whether binding credit constraints and childcare constraints limit the ability of households to send labor migrants, and whether the arrival of a large, stable source of income-here, the South African old-age pension-helps households to overcome these constraints.

Suggested Citation

  • Cally Ardington & Anne Case & Victoria Hosegood, 2007. "Labor supply responses to large social transfers: Longitudinal evidence from South Africa," SALDRU Working Papers 17, Southern Africa Labour and Development Research Unit, University of Cape Town.
    • Handle: RePEc:ldr:wpaper:17
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    References listed on IDEAS

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    3. Esther Duflo, 2003. "Grandmothers and Granddaughters: Old-Age Pensions and Intrahousehold Allocation in South Africa," The World Bank Economic Review, World Bank, vol. 17(1), pages 1-25, June.
    4. Victoria Hosegood & Anne Case & Cally Ardington, 2009. "Labor Supply Responses to Large Social Transfers: Longitudinal Evidence from South Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 22-48, January.
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    More about this item

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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