Impact of social transfers on depressive symptoms: Evidence from the South African Old age Pension

Working Paper 838

Abstract

We study the effect of income receipt in form of Old age pension (OAP) on the prevalence of depressive symptoms using the Centre of Epidemiologic Studies Short Depression Scale (CES-D 10). We exploit the exogeneous age eligibility criteria in a regression discontinuity (RD) design to estimate the impact of OAP on depressive symptoms. Using the randomized inference approach, we find a statistically significant evidence that the OAP reduces depressive symptoms among the beneficiaries. We find this effect vary by gender and employment status. Our result also suggests that the impact of OAP tends to increase with depression scores, that is, those with high depression score tend to benefit more. We note that since the CES-D 10 is a screening tool, this result only provides an indication that the expected positive relationship between income and health holds in this context.