Assessing the impact of social grants on household welfare using morning after simulation and PSM approach

Biyase, Mduduzi (2018): Assessing the impact of social grants on household welfare using morning after simulation and PSM approach.

Abstract

Despite having relatively well-developed social security system, poverty levels in rural parts of South Africa remains very high. This study employs a cross-sectional households’ survey data conducted in Hlokozi village (located in one of the poorest provinces in South Africa – Kwazulu Natal Province) and propensity score matching technique (which accounts for non-random selection of households) to investigate the impact of social grants on rural household welfare. The results reveal that social grants have a significant and positive impact on rural household welfare. Specifically, the nearest neighbour matching estimates suggest that the causal effect for social grants on household welfare is the region of about R 5830. Consistent with the nearest neighbouring method, the results obtained using Kernel matching method shows that social grants are significant in improving rural household welfare. Our finding seem to lend credence to the conclusion of previous studies that social grants (conditional or unconditional) help in the way of lifting households out of poverty and improve their welfare. Thus rural areas (traditional rural areas) should continue to be a chief focus of poverty alleviation efforts in South Africa.

• Item Type: MPRA Paper
• Language: English
• Keywords: PSM, poverty, household welfare and South Africa
• Subjects: I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty

References

References

Akere, D and Adewuyi, A. (2011). Analysis of poverty profile and socioeconomic determinants of welfare among urban household of Ekiti State, Nigeria. Current Research Journal of Social Sciences, 3(1):1-7

Aparicio, F. J and Mesequer, C. (2012). Collective remittances and the State: the 3x1 program in Mexican municipalities. World Development, 40 (1): 206-222

Armstrong, P and Burger, C. (2009). Poverty, inequality and the role of social grants: An analysis using decomposition techniques. Stellenbosch Economic working paper 15/09

Asfaw, S., Carraro, A., Davis, B., Handa, S and Seidenfield, D. (2017) Cash transfers progammes, weather shocks and household welfare: Evidence from randomised experiment in Zambia. Journal of Development Effectiveness, 9 (4):419-442

Banarjee, A., Duflo, E., Glennerster, R and Katherine, D. (2010). Improving immunization coverage in rural India: a clustered randomised controlled evaluation of immunization campaigns with and without incentives. BMJ 340:1-9

Barrientos, A. (2003). What is the impact of non-contributory pensions on poverty? Estimates from Brazil and South Africa. CPRC working paper no 33

Biyase, M and Zwane, T. (2018). Empirical analysis of poverty and household welfare in South Africa. Journal of Developing areas, 52 (1): 116-130

Biyase, M., Zwane, T and Rooderick, S. (2017). Do social grants displace remittances: evidence from South Africa. International Business and Economic research Journal, 16 (4): 275-284

Blattman, C., Fiala, N., Martinez, S. (2013). Generating skilled employment in developing countries: Experimental evidence from Uganda. Unpublished working paper

Booysen, F. (2005). Social grants as a safety net for HIV/AIDS infected households in South Africa. Journal of Social aspects of HIV/AIDS, 1(1): 45-56

Brune, L., Gine, X., Goldberg, J and Yang, D. (2011). Commitment to save: a field experiment in rural Malawi. Policy Research Working Paper series 5748, The world bank Case, A and Deaton, A. (1998). Large cash transfers to elderly in South Africa. The economic Journal 108(450): 1330-1361

Cunha, J. M., De Giorgi, G and Jayachandran, S. (2011). The price effect of cash versus in kind transfers. Technical Report, National Bureau of Economic Research.

Datt, G and Jolliffe, D. (2005). Poverty in Egypt: Modeling and simulation. Economic Development and Cultural Change, 53(2):327-346

Duquette-Rury, L. (2014). Collective remittances and transnational coproduction: the 3x1 program for migrants and household access to public goods in Mexico. Studies in Comparative International Development, 49 (1): 112-139

Edoumiekomu, S., Karimo, T and Tombofo, S. (2013). Determinants of household poverty and vulnerability in

Bayelsa State of Nigeria. International Journal of Humanities and Social sciences invention, 2(12): 14-23

Garcia Zamora, R. (2005). Collective remittances and 3x1 program as a transnational social learning process. Paper presented Mexican migrant social and civic participation in the united States

Geda, A., Jong, N., De Kimenyi, M.S and Mwaba, G. (2005). Determinants of poverty in Kenya: a household level analysis. Economic working paper 2005-44. University of Connecticut, Department of economics working paper series

Glober, W and Sekhampu, T. J. (2011). Determinants of household food expenditure among households receiving social grants in South Africa. Annual World Business Research Conference: Bangkok, Thailand

Gounder, N. (2013). Correlates of poverty in Fiji. An analysis of individual, household and community factors related to poverty: International Journal of Social Economics, 40(10): 923-938

Haushofer, J and Shapiro, J. (2013). Household respond to income changes: evidence from unconditional transfers in Kenya. MIT University press

Kyophilavong, P. (2011). Cash transfers to the poor household. ERIA Research project 2010, No 13

Lekobane, K. R and Seleka, T. B. (2017). Determinants of household welfare and poverty in Botswana, 2002/2003 and 2009/2010. Journal of Poverty, 21(1): 42-60

Levina, S., Van der berg, S and Yu, D. (2011). The impact of cash transfers on household welfare in Namibia. Development Southern Africa, 28 (1): 39-59

Litchfield, J and McGregor, T. (2008). Poverty in Kagera, Tanzania: Characteristics, causes and constrains. PRUS working paper no 42, Poverty Research unit, UK

Maitra, P and Ray, R. (2003). The effect of cash transfers on household expenditure patterns and poverty in South Africa. Journal of Development Economics, 71: 23-49

Maitra, P and Ray, R. (2003). Theeffect of transfers on household expenditure patterns in South Africa. Journal of Development Economics, 71: 23-49

Malik, S. (1996). Determinants of rural poverty in Pakistan: a micro study. Pakistan Development Review, 35(2): 171-181

Mesequer, C and Aparicio, F. J. (2012). Supply or demand? Migration and political manipulation in Mexico. Studies in Comparative International Development, 47(4): 411-440

Mok, T. Y., Gan, C and Sanyal, A. (2007). Determinants of urban household poverty in Malaysia. Journal of Social Sciences, 3(4): 190-196

Mukherjee, S and Benson, T . (2003). Determinants of poverty in Malawi, 1998. World Development, 32(2): 339-358

Nedombeleni, R and Oyekale, A. B. (2015). Welfare impact of social grants in Thulumela local municipality of Limpopo Province, South Africa. The Scientific Journal for theory and Practice of Socio-economic Development, 4(7): 1-22

Posel, D. (2016). Intra-household transfers in South Africa. Prevalence, patterns and poverty. SALDRU, University of Cape Town. SALDRU Working Paper Number 180/NIDS Discussion Paper 2016/7

Satumba, T., Bayat, A and Mohamed, S. (2017). The impact of social grants on poverty reduction in South Africa. Journal of Economics, 8(1): 33-49

Serumaga-Zake, P and Naude, W. (2002). Determinants of rural and urban poverty in the North- West Province of South Africa. Development Southern Africa, 19(4): 561-572

Simpser, A., Duquette-Rury, L., Company, J. A and Ibarra J. F. (2016). The political economy of social spending by local government: a study of 3x1 program in Mexico. Latin American Research Review, 51(1):62-83

The Kenya CT-OVC evaluation team. (2012). The impact of the Kenya cash transfers program for orphans and vulnerable children on household spending. Journal of Development Effectiveness, 4(1): 9-37

Tregenna, F. (2012) “What are the distributional implications of halving poverty in South Africa when growth alone is not enough?” Applied Economics, 44 (20): 2577- 2596.

Woolard, I and Leibbrandt, M. (2010). The evaluation and impact of unconditional cash transfers in South Africa. A Southern Africa Labour Development Research Unit working paper number 51. Cape Town: SALDRU, University of Cape Town

Woolard, I. (2001). An overview of poverty and inequality in South Africa. Working paper prepared for DFID (SA)

Woolard, I., Harttgen, K and Klasen, S. (2011). The history and impact of social security in South Africa: Experiences and Lessons. Canadian Journal of Development Studies, 32(4):357-380

Zimbalist, Z .(2017). Analysing post-apartheid poverty trends by geo-type, 1997-2012: The understated role of urbarnisation and social grants. Development Southern Africa, 34(2): 151-167