Fertility impact of social transfers in Sub-Saharan Africa – what about pensions?

Whilst the impact on fertility of child-related cash transfer in developing countries is fiercely debated, the author of this paper argues that little attention is paid to the fertility impact of old-age cash transfers.

A handful of Sub-Saharan African countries have introduced non-contributory social pensions that cover the great majority of the older population and this paper looks at any impact these high-coverage pension schemes may have had on fertility levels.

Results suggest that having a high-coverage pension system in Sub-Saharan Africa is associated with a reduction of the fertility rate in the range of 0,5 to 1,5 children per woman. The result are robust over time as well as cross-country.

Policy implications:

• a fertility impact of the indicated magnitude is significant when assessing costs and benefits of introducing old age pension schemes, but the author does not want to argue that fertility reduction should be the main motive for introducing old-age pensions
• there exists a wide range of other policy instruments to influence fertility levels, likely to be cheaper and more efficient than pensions in reaching that objective
• much is left to be done when it comes to implementing reproductive health policies in Sub Saharan Africa, but it is important to know the full range of consequences of different policy actions, or   unintended side-effects
• a balanced social protection approach, caring for both elderly and children as proposed by the UN social protection floor might contribute to a balanced fertility impact as well