Age Set vs. Kin: Culture and Financial Ties in East Africa

Abstract

We study how social organization shapes patterns of economic interaction and the effects of national policy, focusing on the distinction between age-based and kin-based groups in sub-Saharan Africa. Motivated by ethnographic accounts suggesting that this distinction affects redistribution, we analyze a cash transfer program in Kenya and find that in age-based societies there are consumption spillovers within the age cohort, but not the extended family, while in kin-based societies we find the opposite. Next, we document that social structure shapes the impact of policy by showing that Uganda's pension program had positive effects on child nutrition only in kin-based societies.

Keywords: social structure, age sets, financial transfers, pensions, child health

JEL Classification: Z1, D1, G55, H55, O12, O55