Grandmother's Pension and Its Effect on Youth Behavior: Evidence from the Cape Panel Study.
Russman, Adam Seth.
- Vast amounts of time, money and resources have been devoted to studying the sexual behaviors of young adults in South Africa in recent years. Teen pregnancy rates are relatively high in South Africa compared to equally developed countries and the spread of HIV/AIDS is of grave concern. Using the South Africa's State Old-Age Pension program as an exogenous shock to household income, I analyze the r... read moreelationship between sexual risk taking and income. Using data from the Cape Area Panel Study and ordinary least squares, fixed effects modeling, I find that grandfathers' pensions have no effect on risky behavior while grandmothers' pensions directly impact risk-taking behaviors. The effects of grandmothers' pensions on sexual activity, condom use and teen pregnancy vary based on the race and gender of the young adult. But the pension measurements potentially suffer from measurement error and are endogenous. To address this issue, I use instrumental variables approach using age-eligibility dummies as instruments for pension recipients. I find that the pension indicators likely suffer from classical measurement error. I still find that grandfathers' pensions have no effect on sexual risk taking. On the other hand, grandmothers' pensions increase overall sexual activity by 0.3%, condom usage by 3.1%, and teen pregnancy by 5.6%. The effects differ by the gender and race of the young adult due to differences in initial income levels and the power structure within South African households.read less