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2014 PAA Annual Meeting, May 1-3, Boston

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Fertility, Intergenerational Transfers, and Economic Development in South Africa

a PSC Research Project

Investigators:   David Lam, Rebecca L. Thornton, Robert Willis

This project brings together economists from the University of Cape Town and the University of Michigan to analyze links between fertility, intergenerational transfers, and economic development in South Africa. The project builds on a ten-year history of collaborative research between UM and UCT. The project will focus on demographic behavior and economic outcomes at the household level. A key tool will be the Cape Area Panel Study (CAPS), a longitudinal survey of young people and their families in metropolitan Cape Town. CAPS, a collaborative project of UM and UCT, began following 4,800 14-22 year-olds in 2002, with the fourth wave completed in 2006. CAPS provides wide-ranging detail about young people’s lives, including sexual activity, childbearing, schooling, employment, earnings, and intergenerational transfers. Another important data resource will be the new South Africa National Income Dynamics Study (NIDS), a project being run by the University of Cape Town on behalf of the South Africa Office of the Presidency. The first wave of NIDS will be collected in 2008. A major focus of the project will be on the economic consequences of South Africa’s high level of teen fertility. Most of this teen fertility is non-marital, and CAPS data indicate that a high fraction of teen pregnancies are unwanted. Compared to other women, teen mothers are much less likely to finish high school, with potentially important consequences for their own earnings and employment opportunities and for the human capital of their children. As in other countries, identifying the causal impact of teen fertility is difficult. The project will take advantage of a number of strategies using CAPS, NIDS, and other South African data sets for identifying the potential impact of reducing teen fertility on women’s human capital and earnings. These include variation in age at menarche, access to family planning and health services, introduction of the Child Support Grant, and variation in sex ratios in rural areas. Another important focus will be on South African’s complex pattern of intergenerational support. This intergenerational support system plays an important role in the human capital accumulation and labor force activity of young people, and interacts with the high level of teen childbearing.

Funding Period: 06/01/2008 to 05/31/2011

Country of Focus: South Africa

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