Grandmothers and Granddaughters: Old-Age Pensions and Intrahousehold Allocation in South Africa

Grandmothers and Granddaughters: Old-Age Pensions and Intrahousehold Allocation in South Africa

2003 | Esther Duflo
This article evaluates the impact of South Africa's old-age pension program on children's nutrition, focusing on whether the gender of the recipient influences the effect. The program, expanded in the early 1990s, provided benefits twice the median per capita income in rural areas. Over a quarter of black children under five lived with a pension recipient. Estimates show that pensions received by women significantly improved girls' anthropometric status (weight for height and height for age), while those received by men had little effect. This suggests that the efficiency of public transfer programs may depend on the gender of the recipient. Cash transfers are rare in developing economies but are increasingly proposed as a way to redistribute resources. While proponents argue that cash transfers are easier to implement and less prone to corruption than in-kind benefits, others worry that they may be less efficient than subsidizing child health investments if parents do not fully internalize the returns. Evidence shows that childhood nutrition affects long-term physical and cognitive development, with low investment in child health having far-reaching consequences for economic growth. However, cash transfers may improve adult consumption but not children's human capital, even if child health investments are inefficient. The article explores the optimal design of cash transfers, questioning whether they should be conditional or unconditional, and whether the gender of the recipient affects outcomes. Evidence suggests that income in women's hands is associated with better child health and higher household spending on nutrients, health, and housing. Programs like Progresa, targeting women, have shown significant effects on children's health, nutrition, and education. The South African old-age pension program, which became universal and noncontributory in 1993, provides an opportunity to evaluate the effect of a large income transfer on child nutrition. The program's effects were analyzed using data from a 1993 national survey, comparing the impact of men's and women's pensions on child nutrition. The results showed that women's pensions significantly improved girls' weight for height and height for age, while men's pensions had no significant effect. This suggests that the gender of the recipient influences the impact of public transfers on child nutrition. The article also discusses the challenges of identifying the effects of the pension program, including potential endogeneity in household composition and unobserved differences between eligible and noneligible households. However, the results suggest that the gender of the recipient plays a crucial role in determining the impact of public transfers on child nutrition. The findings highlight the importance of considering the gender of the recipient in the design of public transfer programs.This article evaluates the impact of South Africa's old-age pension program on children's nutrition, focusing on whether the gender of the recipient influences the effect. The program, expanded in the early 1990s, provided benefits twice the median per capita income in rural areas. Over a quarter of black children under five lived with a pension recipient. Estimates show that pensions received by women significantly improved girls' anthropometric status (weight for height and height for age), while those received by men had little effect. This suggests that the efficiency of public transfer programs may depend on the gender of the recipient. Cash transfers are rare in developing economies but are increasingly proposed as a way to redistribute resources. While proponents argue that cash transfers are easier to implement and less prone to corruption than in-kind benefits, others worry that they may be less efficient than subsidizing child health investments if parents do not fully internalize the returns. Evidence shows that childhood nutrition affects long-term physical and cognitive development, with low investment in child health having far-reaching consequences for economic growth. However, cash transfers may improve adult consumption but not children's human capital, even if child health investments are inefficient. The article explores the optimal design of cash transfers, questioning whether they should be conditional or unconditional, and whether the gender of the recipient affects outcomes. Evidence suggests that income in women's hands is associated with better child health and higher household spending on nutrients, health, and housing. Programs like Progresa, targeting women, have shown significant effects on children's health, nutrition, and education. The South African old-age pension program, which became universal and noncontributory in 1993, provides an opportunity to evaluate the effect of a large income transfer on child nutrition. The program's effects were analyzed using data from a 1993 national survey, comparing the impact of men's and women's pensions on child nutrition. The results showed that women's pensions significantly improved girls' weight for height and height for age, while men's pensions had no significant effect. This suggests that the gender of the recipient influences the impact of public transfers on child nutrition. The article also discusses the challenges of identifying the effects of the pension program, including potential endogeneity in household composition and unobserved differences between eligible and noneligible households. However, the results suggest that the gender of the recipient plays a crucial role in determining the impact of public transfers on child nutrition. The findings highlight the importance of considering the gender of the recipient in the design of public transfer programs.
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