Impact of social security on food choice and vice spending

Please join us for our next Brown Bag Lunch (BBL) Seminar Series of 2025, presented by the Wits School of Economics and Finance.

Join the meeting now

Abstract

Following rich literature that has investigated the effect of South Africa’s generous non-contributary Old Age Pension on various wellbeing outcomes, this paper investigates the effect of OAP on household expenditure (food and vice spending) focussing on food group choice. This is an important question that provide plausible explanation for the positive effect of the OAP on child health found in the literature. Our analysis exploits the exogeneous age-eligibility threshold under the regression discontinuity design and uses a nationally representative dataset.

Results show that eligibility for pension income increases food expenditure and expenditure on animal-based proteins significantly. Further we find that these effects are mostly driven by female age-eligible respondents. Lastly, our quantile effect analysis show that the effect is heterogeneous across the food expenditure distribution with households at the bottom half of the food expenditure distribution experiencing larger effects. Importantly, further analysis of other food categories (carbohydrates, plant-based proteins, vitamins and minerals, fats and sugar) and vice spending did not showcase significant shifts in response to old age pension eligibility in the aggregate as well as disaggregated analysis by gender. 

Add event to calendar