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Household responses to adverse income shocks: Pensioner out-migration and mortality in South Africa

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  • Vimal Ranchhod

    () (School of Economics, SALDRU, University of Cape Town)

Abstract

How do poor households respond to the cessation of cash transfers in developing countries? South Africa's generous social pension system results in most of the poor elderly being the primary 'breadwinner' in the household. I estimate the magnitude of the changes in household composition and labour force activity amongst the resident members of the household, that correlate with a pensioner leaving the household. I use nationally representative matched panel data from several waves of the South African Labour Force Surveys. Compositional changes include the out-migration of school-aged children, and in-migration of middle aged females and older adults of either gender. More than 1 in 4 losing households get an additional older adult. For people who maintain their residency status across waves, I nd large and statistically signi cant increases in employment rates for middle aged females and males (9.3 and 8.1 percentage points in each case), as well as for older adult females and males (10.3 percentage points in each case). For middle aged adults, this is not accompanied by a corresponding increase in labour supply.

Suggested Citation

  • Vimal Ranchhod, 2009. "Household responses to adverse income shocks: Pensioner out-migration and mortality in South Africa," SALDRU Working Papers 35, Southern Africa Labour and Development Research Unit, University of Cape Town.
  • Handle: RePEc:ldr:wpaper:35
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    Cited by:

    1. Claudia Sepúlveda & Ann Harrison & Justin Yifu Lin, 2013. "Annual World Bank Conference on Development Economics—Global 2011 : Development Challenges in a Postcrisis World," World Bank Publications, The World Bank, number 16184.
    2. Abel, Martin, 2013. "Unintended labour supply effects of cash transfer programmes: Evidence from South Africa's old age pension," SALDRU Working Papers 114, Southern Africa Labour and Development Research Unit, University of Cape Town.
    3. Leibbrandt, Murray & Lilenstein, Kezia & Shenker, Callie & Woolard, Ingrid, 2013. "The influence of social transfers on labour supply: A South African and international review," SALDRU Working Papers 112, Southern Africa Labour and Development Research Unit, University of Cape Town.
    4. Rob Davies & James Thurlow, 2010. "Formal–Informal Economy Linkages And Unemployment In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 78(4), pages 437-459, December.
    5. 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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