The Social and Economic Impacts of South Africa's Child Support Grant

This paper uses exogenous variation in eligibility and grant take-up to evaluate the impacts of the Child Support Grant, an unconditional cash transfer program in South Africa, over the period 2002-2005. Author find that increased probability of receiving a Child Support Grant (CSG) is associated with increased school attendance, decreased child hunger, and increased broad labor force participation, while it has no identifiable effect on narrow labor force participation or employment. The magnitude of these effects is economically significant: most notably, grant receipt appears to decrease the probability that a school age child is not attending school by over half. Although not strictly comparable, this effect is actually larger than Skoufias (2001) measures for Progresa transfer program in Mexico, which conditions grant payment on child school attendance. These results are robust across different specifications, but the CSG’s effects appear to be most positive among mothers living in informal dwellings and mothers and household heads with less education. Although the grant’s impact on school attendance is the same for boys and girls, the effect is much larger for children that are living with their mother. The CSG has its effect on school attendance almost entirely on the child who receives the grant, rather than being spread equally among all children in the household, which suggests that grant income is not pooled with other household income sources, contrary to previous studies conducted on the Old Age Pension.