Working Paper: NBER ID: w19929
Authors: Amar Hamoudi; Duncan Thomas
Abstract: We investigate whether living arrangements respond to an arguably exogenous shift in the distribution of power in family economic decision-making. In the early 1990s, the South African Old Age Pension was expanded to cover most black South Africans above a sex-specific age cut-off resulting in a substantial increase in the income of older South Africans and potentially their say in the economic decisions of their families. Beneficiaries of the program are more likely to coreside with adults who have less human capital as measured by height and education. Since height and education are fixed for adults, this cannot be an effect of the pension income but reflects selective changes in living arrangements resulting from the pension. The findings highlight the endogeneity of living arrangements and illustrate the potential value of moving beyond theory and data that are confined to a spatially determined definition of the household.
Keywords: Old Age Pension; living arrangements; family economics; South Africa
JEL Codes: C81; I38; J12; O12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| South African Old Age Pension (OAP) (H55) | living arrangements (R21) |
| South African Old Age Pension (OAP) (H55) | human capital characteristics (J24) |
| pension receipt (H55) | living arrangements (R21) |
| pension receipt (H55) | distribution of income within families (D31) |
| distribution of income within families (D31) | decision-making power towards older adults (J26) |
| living arrangements (R21) | welfare of coresident children and adults (I39) |
| coresidence with adults with lower levels of human capital (O15) | living arrangements (R21) |