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Measuring the impact of social cash transfers on poverty and inequality in Namibia

Author

Listed:
  • Sebastian Levine

    () (United Nation Development programme, Namibia)

  • Servaas van der Berg

    () (Department of Economics, University of Stellenbosch)

  • Derek Yu

    () (Department of Economics, University of Stellenbosch)

Abstract

This paper reviews the system for social cash transfers in Namibia, a middle-income country with a long experience in making available a universal and non-contributory old age pension, child grants using means-testing and quasi-conditionalities and other cash transfers. The paper traces the origins of the cash transfers back to the country’s past annexation into apartheid South Africa and shows how Namibia’s system is now faced with a set of distinct challenges that are particularly pertinent as the authorities are rapidly scaling-up access. Notably, in the years after the remaining elements of racial discrimination were eliminated, and the value of the transfers were equalised across the ethnic groups, new discrepancies have developed in the values of the different grants. Moreover, using newly available household data the paper finds inefficiencies in the means-testing for the child grants – especially when compared to South Africa. In spite of these challenges the paper also shows that social cash transfers have a large effect on poverty reduction and that the effects are particularly positive for the poorest of the poor. The transfers also tend to reduce inequality but this impact is more limited. Simulations indicate the fiscal sustainability of an expanded system of social cash transfers and highlight the potential cost-savings that would accrue from a more effective means-test of the child grants. In the analysis the effects of using income and expenditure data as the basis for the welfare variable are discerned.

Suggested Citation

  • Sebastian Levine & Servaas van der Berg & Derek Yu, 2009. "Measuring the impact of social cash transfers on poverty and inequality in Namibia," Working Papers 25/2009, Stellenbosch University, Department of Economics.
  • Handle: RePEc:sza:wpaper:wpapers98
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    File URL: https://www.ekon.sun.ac.za/wpapers/2009/wp252009/wp-25-2009.pdf
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    Citations

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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. Gemma Wright & Michael Noble & David McLennan & Michell Mpike, 2016. "Updating NAMOD: A Namibian tax-benefit microsimulation model," WIDER Working Paper Series 143, World Institute for Development Economic Research (UNU-WIDER).
    3. Wright, Gemma & Noble, Michael & Barnes, Helen, 2014. "NAMOD: a Namibian tax-benefit microsimulation model," EUROMOD Working Papers EM7/14, EUROMOD at the Institute for Social and Economic Research.
    4. Marco Sanfilippo & Bruno Martorano & Chris De Neubourg, 2012. "The Impact of Social Protection on Children: A review of the literature," Papers inwopa666, Innocenti Working Papers.
    5. Ojijo Odhiambo & Johannes Ashipala & Fabian Mubiana, 2015. "Are Public Works Programmes Effective in Reinforcing Social Protection Systems?," Working Papers 132, International Policy Centre for Inclusive Growth.

    More about this item

    Keywords

    Namibia; Sub-Saharan Africa; Social protection; Social transfers; Old age pension; Disability grants; Child grants;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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