Distributional Policies and Social Cohesion in a High-Unemployment Setting

The paper uses a regression discontinuity design based on the eligibility rule of an unconditional cash transfer program (Old Age Pension) together with multiple rounds of the country’s Social Attitudes Survey and estimates the impact of the cash transfer to the local population. Results show a limited impact of the transfer on social cohesion. Transfer increases life satisfaction and views favorable towards racial diversity. However, it has only a marginal effect on interpersonal trust and a very small effect on attitudes towards immigration.

The focus is on South Africa, a country with the highest unemployment rate worldwide and a major destination hub for the forcibly displaced.