Disability Cash Transfers in the Context of Poverty and Unemployment: The Case of South Africa

Abstract

South Africa’s Disability Grant program has been widely criticized for its poor administration and the dependency culture it promotes. This paper attempts to assess the Disability Grant program’s targeting effectiveness and its effects on labor market behaviors. Using disability self reports and standard measures of economic well being, results suggest that the Disability Grant is relatively well targeted. Exclusion and inclusion errors are substantial but are comparable to those found in developed countries’ disability programs. Increased leniency in disability screening in the program in selected provinces does not appear to have altered labor market behaviors between 2001 and 2003.

Keywords: cash transfers, disability, targeting, labor supply, Africa, South Africa

JEL Classification: H31, J20, O12