Social Pensions, Migration and Household Composition: Evidence from South Africa

Universal availability of social pension is a recent development in South Africa. This paper examines the impact of the aged pension on household size and composition, and on working-age adult migration decisions. Estimation results show that receipt of the aged pension increases household dissolution: on average, a household with more pension recipients will also have more working-age adults migrating away from the household in search of employment. The economic theory in the paper suggests that receipt of the pension gives households a higher income, making them less risk averse, thus making the risky option of migration more attractive.