Child Health and Household Resources in South Africa
Contents
1. Woman Man None Woman Man None Statistic i ii iii Sample i ii ili Male receives pension 0 17 0 68 0 03 Boys born January 1992 1 20 1 8 1 09 0 016 0 034 0 0041 or later 0 19 0 37 0 10 Female receives 0 79 0 47 0 04 Boys born before January 1 62 1 63 1 32 pension 0 018 0 037 0 0050 1992 0 11 0 17 0 053 Non pension income 723 637 908 Girls born January 1992 0 62 0 85 0 94 36 51 22 or later 0 22 0 41 0 11 Rural residence 0 75 0 83 0 67 Girls born before January 1 47 1 29 1 26 0 018 0 028 0 012 1992 0 12 0 045 0 059 Grandparent in 0 95 0 89 0 42 household 0 0081 0 021 0 012 Note The table reports standardized means Standard errors Father is absent 0 67 0 66 0 41 are reported in parentheses 0 020 0 033 0 012 Mother is absent 0 18 0 14 0 08 0 016 0 023 0 0059 bids TO r yf eligible member Interestingly weight given Per capita income 121 123 149 height f short triti st Gncluding pension 4 5 1 3 3 9 eig a measure or snort run nutri lonar sta aa tus is larger in households where there is an Height for age Z score 1 38 1 46 1 21 Gant thon ia Hi hold h th 0 072 0 13 0 036 engl eee an 1n es S W rae ere Weight for height Z 0 28 0 12 0 15 eee Scare 0 08 0 15 0 04 Since all children were measured around the same date if nutrition is indeed affected by the Number of children in 816 286 2 380 the sample Notes The ta2. 2 0 1 1 1 L fe sunt ees 1 01 89 07 89 01 90 07 90 01 91 07 91 01 92 07 92 01 93 Date of Birth FIGURE 3 DIFFERENCE BETWEEN CHILDREN IN ELIGIBLE AND NONELIGIBLE HOUSEHOLDS SHOWN SEPARATELY FOR BOYS AND FOR GIRLS January 1992 are shorter in eligible households Children born after January 1992 are taller in eligible households Figure 2 presents nonpara metric regressions of height for age Z scores as a function of date of birth in eligible and noneli gible households These curves have the shapes traditionally found in developing countries height for age Z scores decline fast in the first two years of life and then stabilize The relative posi tion of the two curves is the same as in Figure 1 In Figure 3 I present the differences between the nonparametric regression of height for age as a function of age in eligible and noneligible VOL 90 NO 2 1 0 T T T T T T T _ Eligible Man Eligible Woman Height Difference Eligible Noneligible 2 0 1 L 1 1 4 godin L 1 01 89 07 89 01 90 07 90 01 91 07 91 01 92 07 92 01 93 Date of Birth FIGURE 4 DIFFERENCE BETWEEN CHILDREN IN ELIGIBLE AND NONELIGIBLE HOUSEHOLDS SHOWN SEPARATELY FOR HOUSEHOLDS WITH ELIGIBLE MEN AND HOUSEHOLDS WITH ELIGIBLE WOMEN households for boys and girls separately The two curves have similar patterns The difference is negative and roughly stable for all children born until January 1991 Then the gap starts
3. metric status of children this paper exploits the fact that height reflects accumulated investments in child nutrition The larger the proportion of her life during which a child is well nourished the taller she will be given her age Due to the ex pansion of the program in the early 1990 s indi viduals of qualified age became more likely to receive a pension and the benefits became sub stantially larger Thus children born after the ex pansion of the program are more likely to have spent a larger fraction of their lives well nourished if they live with a pension recipient to the extent that the pension resulted in improved nutrition In this paper I present nonparametric evidence of the program s effect on nutrition based on this observation I The South African Old Age Pension Program This section presents a brief history and an overview of the functioning of the South Afri can Old Age Pension program It draws exten sively from Frances Lund 1993 Servas Van 394 AEA PAPERS AND PROCEEDINGS der Berg 1994 and Case and Deaton 1998 where a more complete account can be found Social pensions were first introduced in South Africa in the 1920 s for whites During the apart heid era the system was racially discriminatory in many respects First different means tests were applied to each race group Second benefits for whites were much bigger than those for Africans Third whites pensions were distribute
4. 1998 At the end of the apartheid era the t Discussants Timothy Besley London School of Eco nomics Anne Case Princeton University Chris Udry Yale University Massachusetts Institute of Technology 50 Memorial Drive E52 252 Cambridge MA 02142 Financial support from the Fondation Thiers and the Alfred P Sloan Foun dation is thankfully acknowledged I thank Josh Angrist Abhijit Banerjee Tim Besley Pierre Andre Chiappori Rob Jensen Emmanuel Saez Nevin Scrimshaw Duncan Thomas and especially Anne Case and Angus Deaton for many useful comments and encouragement 393 government committed to achieving parity of benefits and eligibility requirements between whites and Africans This was achieved mostly by increasing the benefits received by the Afri cans In 1993 80 percent of African women above age 60 and 77 percent of African men above 65 received the pension The maximum benefit of 370 rands per month aproximately 3 per day was equal to half of the minimum wage and about twice the median income per capita in rural areas Due to living arrangements inherited from the apartheid era close to one third of African children under the age of 5 currently live with a pension recipient Children who live with a pension recipient tend to come from relatively disadvantaged back grounds As a consequence they tend to be smaller than other children their age To estimate the effect of receiving a pension on the anthropo
5. Sample i ii A Height in Centimeters Boys 0 044 0 037 0 044 0 035 Girls 0 009 0 093 0 045 0 045 B Height for Age Z Scores Boys 0 013 0 013 0 010 0 011 Girls 0 001 0 026 0 019 0 014 Notes DOB date of birth Standard errors robust to correlation of residuals within households and to heterosce dasticity are reported in parentheses The average deriva tive is the average monthly rate of change in the difference between g DOB and gN DOB in the time period An easy way to summarize these patterns and to evaluate whether they are significant is to calculate estimates of the average derivative of the function dh d g d g d over the relevant ranges I obtain estimates of g d and g d by running a cubic spline regression of height or height for age on date of birth ex pressed in months I then calculate the analyt ical expressions for the estimated function dh g g and of its derivative and I use the analytical expression of the derivative to calculate the average derivative over the chosen range The average derivative is the average monthly rate at which the difference between the two curves changes In Table 3 I present average derivative esti mates of the difference for children born be tween June 1988 and November 1990 in column i and for children born between January 1991 and June 1993 in column ii The break point in December 1990 is justified
6. closing until the difference becomes positive around January 1992 The difference increases until July 1992 and then stabilizes However among older children the handicap of eligible boys relative to noneligible boys is smaller than the analogous difference for girls among younger children the advantage for boys is also smaller than the analogous difference for girls This suggests a larger impact of the program on the nutrition of girls In Figure 4 the solid line shows the differ ence between the height of children in house holds with an eligible man and that of children in households with no eligible member The broken line shows the difference between the height of children in households with an eligible woman and that of children in households where there is no eligible member households with both a man and a woman eligible are included in both cases but this does not affect the results For eligible women the difference starts negative and decreases in absolute terms from January 1991 until becoming positive after January 1992 For men the difference is less negative before 1991 and becomes less positive afterwards This figure suggests a bigger impact when the pension is received by women than when it is received by men CHILD OUTCOMES IN AFRICA 397 TABLE 3 ESTIMATES OF THE AVERAGE DERIVATIVE OF THE DIFFERENCE BETWEEN G DOB AND gN DOB Time period June 1998 January 1991 December 1990 June 1993
7. CHILD OUTCOMES IN AFRICA Child Health and Household Resources in South Africa Evidence from the Old Age Pension Program By ESTHER DuFLO This paper presents nonparametric evidence on the effects of the expansion of the Old Age Pen sion program in South Africa on child health Did this increase in household resources improve child health and nutrition Does the gender of the re cipient of the pension affect its impact The answers to these questions have very important policy implications There is evi dence that inadequate nutrition during child hood and even in utero affects long term physical development as well as the develop ment of cognitive skills This in turn affects productivity later in life see Partha Dasgupta 1993 John Strauss and Duncan Thomas 1998 T Paul Schultz 1999 In the United States the evidence suggests that monetary transfers to the poor have very little impact on child welfare Janet Currie 1995 Susan Mayer 1997 How ever the effects of parental income and mone tary transfers on child outcomes are likely to be of greater magnitude among poor households in developing countries The South African Pen sion program provides an unusual opportunity to evaluate the possible effects of such a mon etary transfer This paper exploits the rapid increase in the coverage and benefits of the Old Age Pension program in South Africa which took place in the early 1990 s Anne Case and Angus Deaton
8. Nonparametric Evidence The least restrictive implementation of the identification strategy is to plot height or height for age as a function of date of birth in eligible and noneligible households and to examine the relative positions of these two curves This non parametric approach is compelling for two rea sons First it took some years to achieve universal coverage and parity in the benefits Second little is known about the functional form of the child health production function I estimate the equations h g d eF in the sample of eligible children and A g d ej in the sample of noneligible chil dren where h is the height or height for age of the child d is the date of birth of the child and g is an error term Figure 1 shows nonparametric regressions Jianqing Fan s 1992 locally weighted regres sions of height in centimeters as a function of date of birth in eligible and noneligible house holds Not surprisingly height is strongly re lated to age The interesting point is that the curves have the relative positions predicted in the preceding discussion Children born before Noneligible Height for Age Z Score f 1 1 1 L f 01 89 07 89 01 90 07 90 01 91 07 91 01 92 07 92 01 93 Date of Birth FIGURE 2 HEIGHT FOR AGE Z SCORES OF CHILDREN IN ELIGIBLE AND NONELIGIBLE HOUSEHOLDS __ Boys Girls a i F ost wf AW Height Difference Eligible Noneligible b in
9. ble reports sample means Standard errors robust to correlation within the household are reported in parentheses Households in which both a woman and a man are eligible appear in both columns i and ii factors inadequate food and infections Genetic factors become important in adolescence Height given age of young children depends on accumulated investments in nutrition and health care over the life of the child Family background directly affects nutrition therefore even if child nutrition has improved as a result of the extension of the coverage and benefits of the Old Age Pension program height given age still reflects past deprivations or ill nesses especially among the oldest children This precludes inference of the effect of the pension from comparisons of the nutritional sta tus of children in eligible and noneligible house holds since noneligible households are better off than eligible households Descriptive statis tics of height for age and weight for height are presented in Table 1 Children are smaller con trolling for their age in households with an pension older children have had longer periods of low nutrition If the possibility of catch up growth is limited older children who benefited from the program for only a fraction of their lives and grew up in otherwise less favorable environments should be smaller in eligible households than in noneligible households However if the pension had an effect
10. by the pattern of benefits which increased in levels starting in 1991 In panel A I show the results for height in centimeters for boys and girls separately For 398 AEA PAPERS AND PROCEEDINGS boys the average derivative is not significantly different from zero in either subsample For girls the average derivative is close to zero in the first period and significantly different from zero in the second period when the program expanded rapidly Similar results are obtained for height for age Z scores Eligible girls gain on average 0 093 centimeters or 0 026 standard deviations each month 2 23 centimeters or 0 62 standard deviations in two years relative to noneligible girls This is a large effect since the average Z score of eligible children is 1 40 V Conclusion These nonparametric results suggest that the extension of the Old Age Pension program in South Africa has led to an improvement in the health and nutrition of children especially for girls This effect is entirely due to pensions received by women The effects are large The estimates suggest that the pension helped girls to bridge almost half the gap with American girls of the same age Duflo 1999 addresses potential problems with the identification as sumptions made in this paper the omission of other programs affecting the same children and the possibility of endogenous household forma tion The findings reported here are important because they show t
11. d through the postal offices while Africans were distributed through mobile pay points that did not go very far out into rural areas Pressure for equity in the treatment of racial groups became strong toward the end of the apart heid era In 1989 the government committed to achieving racial parity in pension treatment Van der Berg 1994 The benefits for Africans im proved gradually in the 1980 s while those for whites declined rapidly were roughly constant from 1987 to 1990 and were multiplied by 1 5 between 1990 and 1993 The maximum benefit in 1993 the survey year was 370 rands approxi mately 3 per day for a mean monthly household income per capita of 149 rands in this sample By 1993 the pension program had become an unusu ally generous transfer program in terms of the pension share of total income The coverage also increased substantially in the 1990s due to a new attitude within the administration a modification of the means test the computerization of the system and substan tial improvements in the delivery system The current system is universal and noncontributory Payments are made to women older than 60 and to men older than 65 subject to a means test In practice the means test is mainly effective in excluding most whites and those Africans who already have a private pension In 1993 80 percent of the Africans eligible on the basis of their age were receiving a pension The remain ing 20 percent i
12. hat an exogenous increase in income can improve child health in develop ing countries The results also provide a clear example of the difference in the effects of in come in the hands of men and in the hands of women Moreover these findings have imme diate policy implications for the design of pub lic programs First direct income transfers to poor households can contribute to an increase in human capital Second the identity of the trans fer recipient affects its impact If the program were not naturally biased in favor of women it would not improve child health as much of course this does not exclude the possibility that income in the hands of men might affect other types of investments in child human capital Third in the context of the increasing preva MAY 2000 lence of AIDS the evidence that money given to grandparents can reach young children be comes of critical importance REFERENCES Case Anne and Deaton Angus Large Cash Transfers to the Elderly in South Africa Eco nomic Journal September 1998 108 450 pp 1330 61 Currie Janet Welfare and the Well Being of Children in Fundamentals of pure and ap plied economics Vol 59 Chur Switzerland Harwood 1995 Dasgupta Partha Inquiry into well being and destitution Oxford Clarendon 1993 Duflo Esther Grandmothers and Granddaugh ters The Effects of Old Age Pension on Child Health in South Africa Mimeo Mas sachusetts Ins
13. ncluded richer households with a private pension as well as very poor house holds that could not access the system II Data and Descriptive Statistics The data for this paper come from the na tional survey of South Africa carried out jointly by the World Bank and the South African Labor and Development Research Unit at the Univer sity of Cape Town During the last five months of 1993 9 000 randomly selected households MAY 2000 from all races and areas including the inde pendent homelands were interviewed This was a multipurpose household survey similar to most World Bank Living Standards Measure ment surveys Measurements of the height and weight of all children aged less than seven years were taken as part of the survey Environmental factors are especially important determinants of child height in early childhood Therefore the World Health Organization recommends limit ing the analysis of height measures to children 0 5 years old WHO 1986 In addition there appear to have been difficulties in the measure ment of the oldest children Therefore I restrict the sample to children aged 6 60 months Fol lowing the norm recommended by the World Health Organization I construct height for age Z scores by subtracting the median among chil dren the same age and sex in the National Cen ter for Health Statistics NCHS reference population a group of well nourished Ameri can children and dividing by the standard err
14. or in this age and sex group in the NCHS popula tion This normalization does not affect the es sence of the analysis in this paper since I fully control for age effects but it facilitates com parability with other studies Pension take up conditional on age eligibility is potentially endogenous with respect to child health I therefore focus on age eligibility for a pension I consider that a household or by extension a child is eligible for a pension if at least one woman older than 60 or a man older than 65 lives in the household Selected descriptive statistics of the sample of African children are presented in Table 1 for households where there is an eligible woman households where there is an eligible man households where both the woman and the man are eligible appear in both columns and house holds where there is no eligible member Eligi ble households tend to be poorer than the mean Not surprisingly they are often characterized by the presence of a grandparent and the absence of the child s father or mother They are also more likely to live in a rural area Ill Estimating the Effect of Social Pension on Child Health In practice human growth deficits in devel oping countries are caused by two preventable VOL 90 NO 2 TABLE 1 SELECTED DESCRIPTIVE STATISTICS CHILD OUTCOMES IN AFRICA 395 TABLE 2 MEANS OF HEIGHT FOR AGE BY AGE GROUP Eligibility for pension Eligibility for pension
15. the dif ference between eligible and noneligible house holds should be reduced or even reversed for younger children The basic idea of the identification strategy is thus to compare the differences in height be tween children in eligible and noneligible households and between children exposed to the program for a fraction of their lives and children exposed all their lives The descriptive statistics of height and height for age in different sub samples presented in Table 2 illustrate this iden tification strategy Columns i and ii show the height for age of children who live with an el igible man or woman respectively Column iii shows these means among households without an eligible member Among children born be fore January 1992 both boys and girls are smaller in households with an eligible member woman or man than in other households 396 AEA PAPERS AND PROCEEDINGS 105 MAY 2000 Eligible 100 95H Eligible Noneligible 85 WN J Height cm 75 SS J 707 4 L L 1 1 1 f 1 01 89 07 89 01 90 07 90 01 91 07 91 01 92 07 92 01 93 Date of Birth FIGURE 1 HEIGHT OF CHILDREN IN ELIGIBLE AND NONELIGIBLE HOUSEHOLDS However girls born after January 1992 are taller if they live with an eligible woman but not with a man This is not true for boys This suggests that the pension had an effect on the nutrition of girls but only when it was received by a woman IV
16. titute of Technology December 1999 Fan Jianqing Design Adaptive Nonparametric Regression Journal of the American Statis tical Association December 1992 amp 7 420 pp 998 1004 Lund Frances State Social Benefits in South Africa International Social Security Re view January 1993 46 1 pp 5 25 Mayer Susan E What money can t buy Family income and children s life chances Cam bridge MA Harvard University Press 1997 Schultz T Paul Productive Benefits of Im proving Health Evidence from Low Income Countries Mimeo Yale University October 1999 Strauss John and Thomas Duncan Health Nu trition and Economic Development Jour nal of Economic Literature June 1998 36 2 pp 766 817 Van der Berg Servaas Issues in South African Social Security World Bank IFC MIGA Office Memorandum World Bank Washing ton DC 1994 WHO Working Group Use and Interpretation of Anthropometric Indicators of Nutritional Status Bulletin of the World Health Orga nization 1986 64 6 pp 929 41
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