Female Labour Force Participation and the Child Support Grant in South Africa

Katherine C. Eyal, University of Cape Town
Ingrid Woolard, University of Cape Town

We estimate the effect of the child support grant on mothers’ labour market status in South Africa, using unanticipated variation in the age eligibility cut-off value, and a sample of black mothers, aged 20 to 45, whose youngest child is aged within 2 years of the age eligibility cut-off. Balancing tests reveal no systematic differences between mothers with children on either side of this threshold. The grant effect is estimated using OLS, a difference in difference estimator, instrumental variables, and descriptive analysis. The effect of having an age eligible child on employment probability is large and positive, between 8 and 15% depending on the sample, and the nature of the shock. Grant income has a stronger impact in pensioner households, and for younger women. Robustness and specification checks are performed to ensure the estimated effect should not be attributed to age or another variable

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Presented in Session 123: The Effect of Transfer Payments on Household Decisions