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The longrun effects of cash transfers on labour market outcomes

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  • Neryvia Pillay
  • Chloe Allison
  • Kathryn Bankart

Abstract

We study a South African social grant programme that provides unconditional cash transfers to children. Since its introduction in 1998, the age-eligibility threshold for the child support grant was progressively extended from children under 7 to children under 18. Making use of household survey data, we use a difference-in-difference identification strategy that exploits the variation in grant eligibility across age groups generated by these age-eligibility changes to study how cash transfers in childhood can affect long-run labour market outcomes. We find that childhood grant eligibility has no effect on labour market participation, employment and wages in young adulthood. We do find evidence of a negative effect on male labour market participation and wages

Suggested Citation

  • Neryvia Pillay & Chloe Allison & Kathryn Bankart, 2024. "The longrun effects of cash transfers on labour market outcomes," Working Papers 11071, South African Reserve Bank.
    • Handle: RePEc:rbz:wpaper:11071
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    References listed on IDEAS

    as
    1. Anne Case & Victoria Hosegood & Frances Lund, 2005. "The reach and impact of Child Support Grants: evidence from KwaZulu-Natal," Development Southern Africa, Taylor & Francis Journals, vol. 22(4), pages 467-482.
    2. Victoria Hosegood & Anne Case & Cally Ardington, 2009. "Labor Supply Responses to Large Social Transfers: Longitudinal Evidence from South Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 22-48, January.
    3. Marisa Coetzee, 2013. "Finding the Benefits: Estimating the Impact of The South African Child Support Grant," South African Journal of Economics, Economic Society of South Africa, vol. 81(3), pages 427-450, September.
    4. Sarah Baird & David McKenzie & Berk Özler, 2018. "The effects of cash transfers on adult labor market outcomes," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 8(1), pages 1-20, December.
    5. Brantly Callaway & Andrew Goodman-Bacon & Pedro H. C. Sant'Anna, 2021. "Difference-in-Differences with a Continuous Treatment," Papers 2107.02637, arXiv.org, revised Jan 2024.
    6. Eduardo Rodrigues-Oreggia & Samuel Freije, 2012. "Long term impact of a Cash-Transfers Program on Labor Outcomes of the Rural Youth," CID Working Papers 230, Center for International Development at Harvard University.
    7. Adriana D. Kugler & Ingrid Rojas, 2018. "Do CCTs Improve Employment and Earnings in the Very Long-Term? Evidence from Mexico," NBER Working Papers 24248, National Bureau of Economic Research, Inc.
    8. Ken Miyajima, 2024. "The link between social grants and employment in South Africa," International Review of Applied Economics, Taylor & Francis Journals, vol. 38(6), pages 706-717, November.
    9. Posel, Dorrit & Fairburn, James A. & Lund, Frances, 2006. "Labour migration and households: A reconsideration of the effects of the social pension on labour supply in South Africa," Economic Modelling, Elsevier, vol. 23(5), pages 836-853, September.
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