Subjective well-being impact of old age pension in South Africa: A difference in difference analysis across the gender divide
Date
2019-12-06
Authors
Umakrishnan, K
Mfongeh, N. E
Journal Title
Journal ISSN
Volume Title
Publisher
AOSIS (pty) Ltd
Abstract
Background: South Africa provides old age pension (OAP), a non-contributory means-tested
income transfer to persons aged 60 and above. More than two-thirds of the elderly population
report receiving the OAP. Women have historically had a lower pension eligibility age of 60,
while the eligibility of men decreased from 65 to 60 between 2008 and 2010.
Aim: This study analyses the impact of the OAP on the subjective well-being of the elderly in
South Africa. The study aims at understanding the differential impact on the subjective wellbeing of male and female recipients.
Methods: The study adopts the difference in difference (DiD) impact evaluation framework to
establish the impact of OAP using a sub-sample of data for elderly persons aged between 55
and 64, collected from the first four waves of the National Income Dynamics study. Linear and
non-linear DiD models are estimated as robustness checks given the ordinal nature of the
dependent variable.
Results: The OAP variable consistently produced positive and significant estimates for the
sample as a whole. Further, anticipatory effect of OAP was not found to exist. A gender specific
analysis indicates that female recipients have a positive and significant change in well-being as
a result of OAP, while male recipients did not.
Conclusion: The difference in the well-being impact of OAP between male and female recipients
can be attributed to the gender difference in the use and meaning of pensions. Our findings
question the uniform criteria introduced for male and female recipients for OAP in South Africa.
Description
Keywords
State transfers, old age pension, difference in difference, South Africa, impact evaluation.
Citation
Kollamparambil, U. & Etinzock, M.N., 2019, ‘Subjective well-being impact of old age pension in South Africa: A difference in difference analysis across the gender divide’, South African Journal of Economic and Management Sciences 22(1), a2996.