Impact of social cash transfers on young adults' labor force participation, schooling, and sexual behaviors in South Africa

Abstract

Scope and Method of Study: My dissertation consists of two papers examining the impact of South Africa's social cash transfers namely Old Age Pension (OAP) program on labor force participation, schooling, and sexual behaviors of African young adults aged 14-22 using Cape Area Panel Study (CAPS) data. Both papers use Regression Discontinuity Design (RDD) identification strategy to examine the causal effect of OAP on labor force participation, schooling, and sexual behaviors of African young adults. This estimation is made possible by age-eligibility rule of OAP for women and men at 60 and 65 years old, respectively.

Findings and Conclusions: The first paper examines the impact of OAP on labor force participation and schooling of young adults. I find that any OAP, OAPFemale, and OAPMale receipts did not have any significant impact on labor force participation and schooling of young adults aged 14-20. In contrast, OAPFemale receipts have significant and negative impact on labor force participation of young adult males aged 21-26. Although, OAPFemale receipts have positive impact on school enrollment of young adult males aged 21-26, these estimates were not statistically significant. On the other hand, OAPMale receipts have positive and significant impact on labor force participation as well as negative and significant impact on school enrollment of young adult males aged 21-26.

The second paper examines the impact of OAP on sexual behaviors of young adults. I find that OAPFemale receipts reduce the probability of young adult females sexual debut by 15.3% on average. There were no significant impact of any OAP, OAPFemale, and OAPMale receipts on self-reported condom use and number of multiple partners of young adults. Young adult females and males who live with OAPFemale recipients reduce their probability of getting married by 9.1% and 24.1% on average, respectively. On the contrary, young adult females and males who live with OAPMale recipients increase their probability of getting married by 21.4% and 23.8% on average, respectively.

Overall, these results are important because it suggests that OAP can improve African young adults transition into the labor market in time when unemployment is high as well as improve their transition into adulthood in time when HIV/AIDS infection rate is high.