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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

msamson@epri.org.za

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
slide3
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)

slide4
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

slide6
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

slide13
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

slide14
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
  • 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.