Conditional cash transfers as a means of addressing poverty in South Africa

Abstract

In this thesis the feasibility of making social transfers conditional in South Africa is examined with specific focus on the Child Support Grant. Currently, there are more than 8.7 million children receiving Child Support Grants, which is impacting positively on poverty alleviation. Yet, social outcomes, especially in health and education are poor. The conditionality of transfers will compel the parents/guardians of these children to ensure that the children regularly attend school and also utilise the health services. Conditional cash transfers, by their nature, attempt to address the low demand for these services, which are available but are not being utilised. The National Income Dynamic Study (NIDS) is employed to test empirically whether it will be feasible to institute conditionality to the CSG. The methodology adopted is to determine if there is any statistically significant difference (education and health outcomes) between the recipients of the CSG with non-recipients of the CSG. Moreover, the population (as extrapolated from the sample) is separated into four groups, namely, children that qualify and receive the grant (QR), children that qualify and do not receive the grant (QNR), children that do not qualify and receive the grant (NQR) and children that do not qualify and do not receive the grant (NQNR). Subsequently, educational and health outcomes are compared between these groups to determine if there is any statistically significant difference between them. The results demonstrate that school attendance is high among children, and there is no significant difference in school attendance between the recipients and non-recipients of the CSG; as well as between the QR, QNR, NQR and NQNR. Moreover, there is no substantial difference in education outcomes (grade repetition) between the recipients and non-recipients of the CSG; as well as between the four groups. Similar results are found for health where there is no statistically significant difference between the groups regarding utilisation of health services as well as health outcomes. Therefore, conditionality of the CSG would not be feasible, as it does not address the causes of poor health and education outcomes, which are mainly due to supply-side deficiencies. Government should rather strengthen current poverty alleviation policies which seem to be impacting positively on poverty reduction.