Public Policy and Extended Families: Evidence from South Africa

Marianne Bertrand, Douglas Miller and Sendhil Mullainathan

No 7594, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Tightly knit extended families, in which people often give money to and get money from relatives, characterize many developing countries. These intra-family flows mean that public policies may affect a very different group of people than the one they target. To assess the empirical importance of these effects, we study a cash pension program in South Africa that targets the elderly. Focusing on three-generation households , we use the variation in pension receipt that comes from differences in the age of the elder(s) in the households. We find a sharp drop in the labor force participation of prime-age men in these households when elder women reach 60 years old or elder mean reach 65, the respective ages for pension eligibility. We also find that the drop in labor supply diminishes with family size, as the pension money is split over more people, and with educational attainment, as the pension money becomes less significant relative to outside earnings. Other findings suggest that power within the family might play an important role: (1) labor supply drops less when the pension is received by a man rather than by a woman; (2) middle aged men (those more likely to have control in the family) reduce labor supply more than younger men; and (3) female labor supply is unaffected. These last two findings also respectively suggest that the results are unlikely to be driven by increased human capital investment or by a need to stay home to care for the elderly. As a whole, this public policy seems to have had large effects on a group-prime age men living with the old-quite different from the one it originally targeted-elderly men and women.

JEL-codes: D1 E2 (search for similar items in EconPapers)
Date: 2000-03
New Economics Papers: this item is included in nep-pbe
Note: AG LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published as Marianne Bertrand & Sendhil Mullainathan & Douglas Miller, 2003. "Public Policy and Extended Families: Evidence from Pensions in South Africa," World Bank Economic Review, Oxford University Press, vol. 17(1), pages 27-50, June.

Downloads: (external link)
http://www.nber.org/papers/w7594.pdf (application/pdf)

Related works:
Journal Article: Public Policy and Extended Families: Evidence from Pensions in South Africa (2003)
Working Paper: Public Policy and Extended Families: Evidence from South Africa (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:7594

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w7594

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().