ABSTRACT
The social pension system in South Africa is among the most far-reaching and generous in the developing world (Armando Barrientos and Peter Lloyd-Sherlock 2002). Representing the core component of the South African social safety net, the pension is a noncontributory, means-tested pension that is payable to women aged 60 and above and men aged 65 and above. The pension has a strong gender dimension: different age eligibility rules and different male and female mortality rates ensure that the pension reaches significantly more elderly women than men. Moreover, key demographic trends, such as the large population share of school-going youth, very high unemployment rates, and the devastating impact of the HIV/AIDS epidemic on younger age cohorts have placed the social old-age pension and the elderly1 at the center of the livelihood strategies of many South African households. In this context, the social pension plays a vital role as a poverty-alleviation mechanism, with the effect of pension income on the welfare of other household members being strongly conditioned upon whether or not the pensioner is female (Marianne Bertrand, Sendhil Mullainathan, and Douglas Miller 2003; Esther Duflo 2003; Malcolm
Keswell 2004b; Dori Posel, James Fairburn, and Frances Lund 2004). Thus, while elderly women benefit significantly from the pension system, important externalities such as changes in household composition and allocation of labor time, as well as changes in child health and educational status, are also associated with pension receipt, especially if the pensioner is female.
