Evaluating the significance of cash transfers on household consumption

The Old Age Pension (OAP) to elderly South Africans is one of the biggest programs in developing countries. It's a vital income source to many households because it puts a significant cash transfer into the hands of many poor households, and the sharp increase in its take‐up at the minimum eligibility age further demonstrates its importance. This paper estimates the OAP's impact on households’ food security, quality of water and sanitation facilities, where the last two are essential public health‐related outcomes. We find that the OAP has a significant and positive impact on food security, but not on the quality of drinking water and sanitation. We attribute the latter to the high fixed costs associated with access to quality drinking water and proper sanitation services and their nature as a form of public good. The paper further attempts to understand whether gender influences these outcomes.