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UN Department of Economic and Social Affairs Universal Benefits: Delivering rights and reducing poverty 8 February 2007, 1.15 – 3.00 pm United Nations Building, Conference Room D. T he social and economic impact of benefits to children and older people in Southern Africa.

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Michael samson msamson@epri org za

UN Department of Economic and Social AffairsUniversal Benefits: Delivering rights and reducing poverty8 February 2007, 1.15 – 3.00 pm United Nations Building, Conference Room D

The social and economic impact of benefits

to children

and older people

in Southern Africa

Michael Samson

[email protected]


Overview
Overview

  • THE PROBLEM: Poverty in Southern Africa disproportionately affects children and older people

  • THE INSTRUMENT: Social transfers provide regular cash payments to poor households

  • THE OUTCOMES:

    • MDGs: poverty, hunger, education, health, equality

    • Decent work: jobs and empowerment

    • break the inter-generational cycle of disadvantage

    • Macroeconomic benefits


Households with older people and children are on average poorer than other household types in most African countries

Older people & children

Only older people

No older people

SOURCE: Kakwani and Subbarao (2005)


South Africa’s cash transfers produce remarkable social outcomes while supporting economic growth and broad developmental impacts

  • Sub-Saharan Africa’s oldest social transfer program

  • Costs 3% of GDP

  • Substantial impact on poverty reduction

  • Extensive studies of growth outcomes

    • Human capital

    • Labor markets

    • Development

South Africa


South africa s social grants reduce poverty and destitution substantially
South Africa’s social grants reduce poverty and destitution substantially

48% reduction

67% reduction


The universal social pension in Lesotho mainly protects children and promotes human capital accumulation

  • The world’s newest universal social pension, started in 2004

  • Costs 1.4% of GDP

  • 65% of the cash is spent on children cared for by older people

  • Supports human capital investment, particularly for OVCs

Lesotho


Impact of south africa s social pension on adult labor force participation
Impact of South Africa’s Social Pension on adult labor force participation

SOURCE: Statistics South Africa Labor Force Surveys and EPRI calculations


Impact of south africa s social pension on adult labor force participation1
Impact of South Africa’s Social Pension on adult labor force participation

SOURCE: Statistics South Africa Labor Force Surveys and EPRI calculations


Impact of south africa s child support grant on adult labor force participation
Impact of South Africa’s Child Support Grant on adult labor force participation

SOURCE: Statistics South Africa Labor Force Surveys and EPRI calculations


Impact of south africa s child support grant on adult labor force participation1
Impact of South Africa’s Child Support Grant on adult labor force participation

SOURCE: Statistics South Africa Labor Force Surveys and EPRI calculations


Impact of south africa s child support grant on women s labor force participation
Impact of South Africa’s Child Support Grant on women’s labor force participation

SOURCE: Statistics South Africa Labor Force Surveys and EPRI calculations


Impact of south africa s child support grant on women s labor force participation1
Impact of South Africa’s Child Support Grant on women’s labor force participation

SOURCE: Statistics South Africa Labor Force Surveys and EPRI calculations


Social transfers in Namibia protect children and older people, support labour market participation and promote local economic activity

  • A transformed pension system since democracy in 1990

  • Near-universal take-up (85%)

  • Costs 0.7% of GDP

  • Supports labour market participation, particularly for women

  • Stimulates local markets

Namibia


Spending shares vary by income group—and social transfers redistribute income and restructure the composition of spending

An illustration from South Africa

Source: Statistics South Africa Income and Expenditure Survey 2000


Conclusions
Conclusions redistribute income and restructure the composition of spending

  • For countries in Africa, social transfers have demonstrated considerable success in helping to achieve MDGs in areas of poverty reduction, nutrition, education, health, equality.

  • In many countries they are the most effective government program for reducing poverty.

  • They help to break the cycle of inter-generational transmission of disadvantage.

  • Social transfers do not create dependency—they often break dependency traps, particularly by nurturing productive high-return risk-taking and promoting decent work.

  • Social transfers are developmental.


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