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The Labour Supply Effects of the South African State Old Age Pension: Theory, Evidence and Implications

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  • Alexis Sienaert

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Abstract

This paper examines the impact of South Africa’s state old age pension on the labour supply of working age members of pension-receiving households. A range of identification strategies are employed in an attempt to make full use of recent labour force survey data. Results suggest fairly modest, negative impacts on participation and employment on average, but a pronounced, positive migration impact. As such, they marry the results of Bertrand, Mullainathan and Miller (2003) and Posel, Fairburn and Lund (2006), using more recent (and nationally-representative) data. Concluding sections consider implications, and question whether gender-differentiated effects are grounds for rejecting the income-pooling hypothesis.

Suggested Citation

  • Alexis Sienaert, 2008. "The Labour Supply Effects of the South African State Old Age Pension: Theory, Evidence and Implications," SALDRU Working Papers 20, Southern Africa Labour and Development Research Unit, University of Cape Town.
  • Handle: RePEc:ldr:wpaper:20
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    File URL: http://opensaldru.uct.ac.za/bitstream/handle/11090/35/2008_20.pdf?sequence=1
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    References listed on IDEAS

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    1. Abhijit Banerjee & Sebastian Galiani & Jim Levinsohn & Zoë McLaren & Ingrid Woolard, 2008. "Why has unemployment risen in the New South Africa?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 715-740, October.
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    5. Case, Anne & Deaton, Angus, 1998. "Large Cash Transfers to the Elderly in South Africa," Economic Journal, Royal Economic Society, vol. 108(450), pages 1330-1361, September.
    6. Marianne Bertrand & Sendhil Mullainathan & Douglas Miller, 2003. "Public Policy and Extended Families: Evidence from Pensions in South Africa," World Bank Economic Review, World Bank Group, vol. 17(1), pages 27-50, June.
    7. Sebastian Galliani & James Levinsohn & Ingrid Woolard, 2006. "Why Has Unemployment Risen in the New South Africa?," CID Working Papers 134, Center for International Development at Harvard University.
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    Cited by:

    1. Barrientos, Armando & Nino-Zarazua, Miguel, 2010. "Social Assistance in Developing Countries Database Version 5.0," MPRA Paper 20001, University Library of Munich, Germany.
    2. Inés Berniell & Dolores de la Mata & Matilde P. Machado, 2013. "The impact of a permanent Income shock on the situation of women in the household: the case of a pension reform in Argentina," DOCUMENTOS DE TRABAJO 011037, UNIVERSIDAD DEL ROSARIO.

    More about this item

    Keywords

    Labour Supply; Social Security and Public Pensions; Intrahousehold Allocation;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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