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The nexus between social grants and participation rates: Dynamics across generations in the South African labour market

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  • Burger, Rulof
  • von Fintel, Dieter
  • Grün, Carola

Abstract

This paper will have a closer look at the role of South African welfare programs on the labour supply decision across generations. From a theoretical point of view, a change in non-labour household income will affect the decision to participate in the labour market. Previous studies have focused on prime age adults and elderly and could confirm a significant decrease in labour supply of individuals living in a pensioner's household. However, past research did not look at the intergenerational pattern and broader socio-economic conditions when evaluating the impacts of social grants. Our preliminary results suggest that the behavioural response to welfare programs differs by age group. In particular, labour supply of the young living in a pensioner's household has increased. Also, intergenerational differences in participation rates can be explained by educational policies, designed specifically to address over-age students in the public schooling system.

Suggested Citation

  • Burger, Rulof & von Fintel, Dieter & Grün, Carola, 2010. "The nexus between social grants and participation rates: Dynamics across generations in the South African labour market," Proceedings of the German Development Economics Conference, Hannover 2010 26, Verein für Socialpolitik, Research Committee Development Economics.
    • Handle: RePEc:zbw:gdec10:26
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    References listed on IDEAS

    as
    1. Stephan Klasen & Ingrid Woolard, 2009. "Surviving Unemployment Without State Support: Unemployment and Household Formation in South Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 18(1), pages 1-51, January.
    2. Armando Barrientos & James Scott, 2008. "Social Transfers and Growth: A Review," Global Development Institute Working Paper Series 5208, GDI, The University of Manchester.
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    More about this item

    Keywords

    labour market participation; social grants; South Africa;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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