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

  • Alexis Sienaert

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    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.

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    File URL: http://opensaldru.uct.ac.za/bitstream/handle/11090/35/2008_20.pdf?sequence=1
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    Paper provided by Southern Africa Labour and Development Research Unit, University of Cape Town in its series SALDRU Working Papers with number 20.

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    Length: 70 pages
    Date of creation: Jun 2008
    Date of revision:
    Handle: RePEc:ldr:wpaper:20
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    1. Geeta Kingdon & John Knight, 2001. "Race and the Incidence of Unemployment in South Africa," CSAE Working Paper Series 2001-18, Centre for the Study of African Economies, University of Oxford.
    2. Case, Anne & Deaton, Angus, 1998. "Large Cash Transfers to the Elderly in South Africa," Economic Journal, Royal Economic Society, vol. 108(450), pages 1330-61, September.
    3. Edmonds, Eric V., 2006. "Child labor and schooling responses to anticipated income in South Africa," Journal of Development Economics, Elsevier, vol. 81(2), pages 386-414, December.
    4. Justine Burns & Malcolm Keswell & Murray Leibbrandt, 2005. "Social Assistance, Gender, And The Aged In South Africa," Feminist Economics, Taylor & Francis Journals, vol. 11(2), pages 103-115.
    5. Marianne Bertrand & Douglas Miller & Sendhil Mullainathan, 1999. "Public Policy and Extended Families: Evidence from South Africa," Working Papers 801, Princeton University, Department of Economics, Industrial Relations Section..
    6. Bergstrom, Theodore C., 1993. "A survey of theories of the family," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 2, pages 21-79 Elsevier.
    7. David Lam & Murray Leibbrandt & Vimal Ranchhod, 2005. "Labour force withdrawal of the elderly in South Africa," SALDRU/CSSR Working Papers 118, Southern Africa Labour and Development Research Unit, University of Cape Town.
    8. Abhijit Banerjee & Sebastian Galiani & Jim Levinsohn & Zoë McLaren & Ingrid Woolard, 2007. "Why Has Unemployment Risen in the New South Africa," NBER Working Papers 13167, National Bureau of Economic Research, Inc.
    9. Martin Wittenberg & Mark Collinson, 2007. "Restructuring of Households in Rural South Africa: Reflections on Average Household Size in the Agincourt Sub-district 1992-2003," SALDRU Working Papers 12, Southern Africa Labour and Development Research Unit, University of Cape Town.
    10. Stephan Klasen & Ingrid Woolard, 2001. "Surviving Unemployment without State Support: Unemployment and Household Formation in South Africa," CESifo Working Paper Series 533, CESifo Group Munich.
    11. Guido Imbens & Thomas Lemieux, 2007. "Regression Discontinuity Designs: A Guide to Practice," NBER Working Papers 13039, National Bureau of Economic Research, Inc.
    12. 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.
    13. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June.
    14. Vimal Ranchhod, 2006. "The Effect Of The South African Old Age Pension On Labour Supply Of The Elderly," South African Journal of Economics, Economic Society of South Africa, vol. 74(4), pages 725-744, December.
    15. 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.
    16. Austin Nichols, 2007. "RD: Stata module for regression discontinuity estimation," Statistical Software Components S456888, Boston College Department of Economics, revised 14 Jun 2014.
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