The study evaluates the
impact of the presence of an individual who is age eligible for “state
old
er
p
e
rsons
’
grant” on the labour force participation of prime age individuals who live with
these individuals. Exploiting the panel structure of the National Income Dynamic Study (NIDS)
data set, the study uses all three waves (2008, 2010 and 2012) of the data set to estimate if
whether or not a causal relationship exists between the probability of employment of these prime
age individuals and the existence of an individual eligible for
pension in the household. Apart
from employing cross sectional methods
, the study makes use of pooled OLS and an Individual
Fixed Effect model to estimate different equation specifications which control for various
factors. To facilitate better com
parison with previous literature, certain regression specifications
in both the cross section and Panel evaluation methods restricts the sample to households with at
least three generations of individuals residing within the household unit. Consistent with
previous research, cross sectional results show that holding other factors that affect the
probability of employment constant, there exists a negative association between the existence of
age eligible individuals in households with prime aged adults, and
the probability that these
adults are employed. Contrary to previous research however, the panel results uphold instead of
contradicting the results from cross sectional analysis and hence suggest that there indeed exists
a negative causal relationship bet
ween the existence of at least one pension eligible individual
and the probability that prime age adults living with them are employed. The results also find
that consistent with previous research, the males in the household are the major drivers of this
e
ffect.