Bargaining with grandma: the impact of the South African pension on household decision making

The expansion of the South African old age pension is interesting to economists firstly because extent to which this money effectively increases the well-being of those who receive it is an important question for a policymaking, but also as the pension is distributed on an individual, not household, level and is given to both men and women. Therefore it helps with examination of economic models of household decision-making. This study finds that eligible females are more likely to be the primary decision-makers for expenditures. This increase in decision-making power provides a channel for pensions to have positive impacts for households - leading to improved nutritional outcomes for girls and higher levels of durable goods ownership. But an analysis of income data shows that due to labour force withdrawal, male income does not increase with eligibility so despite previous evidence, elderly women in South Africa do not necessarily direct income towards more productive uses than men.