Rearranging the Family? Income Support and Elderly Living Arrangements in a Low Income Country

Eric Edmonds, Kristin Mammen, Douglas L. Miller

NBER Working Paper No. 10306
Issued in February 2004
NBER Program(s):Children

Despite the importance of living arrangements for well-being and production, the effect of changes in household income on living arrangements is not well understood. This study overcomes the identification problems that have limited the study of the link between income and living arrangements by exploiting a discontinuity in the benefit formula for the social pension in South Africa. In contrast to the findings of the existing literature from wealthier populations, we find no evidence that pension income is used to maintain the independence of black elders in South Africa. Rather, potential beneficiaries alter their household structure. Prime working age women depart, and we observe an increase in children under 5 and young women of child-bearing age. These shifts in co-residence patterns are consistent with a setting where prime age women have comparative advantage in work away from extended family relative to younger women. The additional income from old age support may induce a change in living arrangements to exploit this advantage.

download in pdf format
   (254 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w10306

Published: Edmonds, Eric, K. Mammen and D. Miller. "Rearranging the Family? Household Composition Responses to Large Pension Receipts." The Journal of Human Resources 40, 1 (Winter 2005): 186-207. citation courtesy of

Users who downloaded this paper also downloaded* these:
Ardington, Case, and Hosegood w13442 Labor Supply Responses to Large Social Transfers: Longitudinal Evidence from South Africa
Bertrand, Miller, and Mullainathan w7594 Public Policy and Extended Families: Evidence from South Africa
Engelhardt, Gruber, and Perry w8911 Social Security and Elderly Living Arrangements
Edmonds w10265 Does Illiquidity Alter Child Labor and Schooling Decisions? Evidence from Household Responses to Anticipated Cash Transfers in South Africa
Börsch-Supan, Hajivassiliou, and Kotlikoff Health, Children, and Elderly Living Arrangements: A Multiperiod-Multinomial Probit Model with Unobserved Heterogeneity and Autocorrelated Errors
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us