28 Jul The role of social grants in economically enabling South African women
South Africa has a well-developed system of social assistance grants that are, partly by design, paid out mainly to women. The prioritisation of social assistance in the national budget is in line with Section 27(1) of the Constitution, which states that “everyone has the right to have access to … social security, including, if they are unable to support themselves and their dependants, appropriate social assistance”.
This Constitutional framework has given rise to a system of social grants that provides primarily for categories of individuals who are considered least likely to be able to provide for their own needs, namely the elderly, people living with disabilities, and children. Excluding the temporary Social Relief of Distress ‘COVID’ Grant,(1) 18.3 million grants are paid out each month, of which 13.6 million are for children. The cost of these grants amounts to 3.1% of the gross domestic product,(2) which is double the median spending across developing and transitioning economies.(3)
Grants support poor families
The grants are a key action in government’s anti-poverty strategy. Goldman et al.(4) found that grants keep about 6 million people above the food poverty line of R624 per person per month. The grants are exceptionally well targeted: Figure 1 shows grant receipt by decile (where Decile 1 is the poorest 10% of households and Decile 10 is the richest 10% of households). Figure 1 shows that the Child Support Grant (CSG) is the most pro-poor of the grants, with 74% of households in Decile 1 receiving the CSG, compared to less than 1% of households in the richest decile.(5) The grants thus play an important role in reducing short-run extreme poverty and ensuring that people are able to eat and obtain the most basic necessities.
Source: Own analysis of 2014/15 Living Conditions Survey of Stats SA
Grants as a mechanism for increasing human capital
In addition to reducing immediate poverty and hunger, the grants play a role in helping to break the cycle of poverty for the next generation. Grants provide a predictable and reliable source of income, which can have significant effects on the capacity of households to invest in human and physical capital. There is evidence that household receipt of the Old-age Pension (OAP) has a positive effect on child nutrition,(6) despite the grant being intended to support the older adult. The effect is particularly strong when the pensioner is a woman.
A consequence of spatial apartheid planning is that pensioners are often located in rural areas (especially the former homelands), while jobs are more likely to be located in urban areas, making economic migration a necessity for many. Two influential papers(7)(8) have shown that women are significantly more likely to be migrant workers when they are members of a household in receipt of a pension, especially when the pension recipient is female, an illustration of women enabling other women to be economically active. The authors postulate that the pension income relieves financial and childcare constraints on job searches.
There is also evidence that the grants have a positive effect on child nutrition. Agüero, Carter, and Woolard(9) found that children who received the CSG during the first three years of their life (that is, within the so-called ‘nutritional window’ during which adult height is largely determined) have significantly higher height-for-age scores than those who did not. More recently, Eyal et al.(10) found that the CSG has a positive effect on keeping adolescents in school. CSG beneficiaries have enrolment rates about 10 percentage points higher than non-beneficiaries.
The CSG, like the OAP, is clearly a key instrument in improving both health- and educational outcomes of South African children.
Grants go primarily to women
More than three-fifths of OAPs go to women11. This is unsurprising, given that women live longer than men, and they are less likely to have been able to accumulate private savings prior to retirement. This is as a result of historical and persistent labour market inequalities, as well as the disproportionate burden of household and care responsibilities borne by women.
The CSG is intended to “follow the child”, and should be paid to the person who is primarily responsible for the day-to-day care of the child. Almost all (96%)(11) of CSG payments go to women, usually (but not necessarily) the biological mother or grandmother of the child. This is largely by design: the architects of the CSG,(12) the Lund Commission, were led by international empirical evidence that women are more likely to utilise cash transfers to purchase food and child goods.
Grants and teen pregnancy
There is ongoing public discussion as to whether the child grants might encourage childbearing, particularly amongst teenagers. The empirical evidence, however, runs counter to this. First, recent national surveys suggest that the number of pregnancies among young women is not increasing,(13) despite the expansion of the CSG over the past two decades. Second, survey data suggest that younger mothers are much less likely than older mothers to apply for the CSG, even when the child meets the eligibility criteria.
It is not clear why this is, but it is possible that young mothers are embarrassed to apply, or are under the impression that they cannot access a CSG for their own child while they themselves are still technically a child (and themselves the ‘child’ beneficiary of a CSG, since this extends up the age of 18). Third, the evidence is clear that most teenage pregnancies are unplanned and often unwanted, with pregnancy and childbearing being the result of inadequate knowledge about sex, unequal gender relations, a lack of access to contraceptive services, and risky behaviours.(14)
The evidence therefore does not support the idea that the availability of the CSG increases teenage childbearing.
Grants as a mechanism for empowerment
The grants play a transformative role beyond the immediate benefits of redistributing cash. Recent qualitative evidence(15) shows that receipt of this small, regular income provided by the CSG expands women’s autonomy, choices, dignity, and social recognition. The CSG gives women some small measure of financial independence and increases decision-making power over financial resources and decisions about children’s well-being.(16) There is also some evidence that CSG receipt enhances a woman’s ability to participate in community life, for example, through participation in rotational savings schemes (‘stokvels’), which, in turn, have positive impacts on social cohesion and reciprocity amongst each other.
The extensive system of social grants increases women’s incomes and lessens the gender poverty gap. The grants assist women in meeting the basic needs of their families and keeping their children in school, in the hope of a better future for the next generation. Further, there is evidence that household grant receipt increases job searches by loosening financial and childcare constraints, running counter to the widely held belief that the grants promote dependency and welfarism.
Despite the small value of the grants, access to this reliable form of income increases women’s autonomy and promotes social cohesion among groups of women. While grants are certainly not a silver bullet for solving all of South Africa’s ills, they are an important part of an overall package of economic support.