Large Cash Transfers to the Elderly in South Africa

40 Pages Posted: 24 Sep 1996 Last revised: 14 May 2000

See all articles by Anne Case

Anne Case

Princeton University - Research Program in Development Studies; National Bureau of Economic Research (NBER)

Angus Deaton

Princeton University; National Bureau of Economic Research (NBER)

Date Written: May 1996

Abstract

We examine the social pension in South Africa, where large cash sumsþabout twice the median per capita income of African householdsþare paid to people qualified by age but irrespective of previous contributions. We present the history of the scheme and use a 1993 nationally representative survey to investigate the redistributive consequences of the transfers, documenting who receives the pensions, their levels of living, and those of their families. We also look at behavioral effects, particularly the effects of the cash receipts on the allocation of income to food, schooling, transfers, and savings. Two methodological issues run through our analysis. The first is the danger of interpreting simple correlations and regressions without adequate consideration of likely biases. The second is the problem of measuring the effects of a program that is determined by individual or household characteristics. We examine both in the context of the South African pension. Our results are consistent with the view that pension income is spent in much the same way as other income, and that a rand is a rand, regardless of its source.

Suggested Citation

Case, Anne and Deaton, Angus S., Large Cash Transfers to the Elderly in South Africa (May 1996). NBER Working Paper No. w5572, Available at SSRN: https://ssrn.com/abstract=4247

Anne Case (Contact Author)

Princeton University - Research Program in Development Studies ( email )

Woodrow Wilson School
345 Wallace Hall
Princeton, NJ 08544
United States
609-258-2177 (Phone)
609-258-5974 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Angus S. Deaton

Princeton University ( email )

Woodrow Wilson School
Princeton, NJ 08544
United States
609-258-5967 (Phone)
609-258-5974 (Fax)

HOME PAGE: http://www.wws.princeton.edu/~deaton

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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