Edmonds, Eric V., Kristin Mammen, Douglas L. Miller. 2005. “Rearranging the Family? Income Support and Elderly Living Arrangements in a Low-Income Country.” Journal of Human Resources 40(1): 186-207.

This study examines the link between income and living arrangements. Our identification comes from exploiting a discontinuity in age in the benefit formula for the social pension in South Africa. In contrast to previous literature, we find no association between pension income and elderly independence. We do find that potential beneficiaries alter their household structure when they become pension-eligible. Prime working-age women depart, and the presence of children younger than five and young women of childbearing age increase. These shifts in coresidence patterns are consistent with a setting where prime-age women have comparative advantage in work away from extended family relative to younger women. The additional income from old-age support may induce a change in living arrangements to exploit this advantage.

Eric V. Edmonds is an assistant professor of economics at Dartmouth College and a faculty research fellow at the National Bureau of Economic Research. Kristin Mammen is an assistant professor of economics at Barnard College of Columbia University. Douglas L. Miller is an assistant professor of economics at the University of California, Davis. The authors wish to thank Kristin Butcher, Anne Case, Angus Deaton, Nina Pavcnik, Dori Posel, Martin Wittenberg, two anonymous referees, NEUDC participants, and participants in the UC-Berkeley Development seminar for their helpful comments. The data used in this article can be obtained beginning October 2005 through September 2008 from Douglas L. Miller, Department of Economics, University of California at Davis, Davis, CA 95616, dlmiller@ucdavis.edu. The raw data are available from the South African Data Archive, http://www.nrf.ac.za/sada/, sada@nrf.ac.za.