Do Social Grants Displace Remittances? Evidence From South Africa

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Mduduzi Biyase
Talent Zwane
September Rooderick

Keywords

Tobit Model; Rural Households; Urban Households and South Africa

Abstract

This paper employs a newly-available and representative National Income Dynamics Study (NIDS) data of South African households to investigate whether social grants crowd-out or displace remittances. The estimated results based on full sample reveal that while the social grants have a negative impact on the amount of remittances received, the effect is statistically insignificant – social grants do not crowd out or displace remittances. The coefficient on the social grant is also insignificant in both sub-samples (rural and urban), consistent with the results on the full sample

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