This paper investigates the determination of reservation wages among residents of Cape Town, South Africa. Particular attention will be paid to the ways in which welfare recipience affects reservation wage determination and subsequent labor-leisure decision-making. Data is drawn from the Khayelitsha/Mitchell's Plain (KMP) survey, conducted in the Cape Town metropolitan area in 2000. The results show that a variety of factors, including recipience of the South African state Child Support Grant (CSG), are significant in explaining the variation in reservation wages reported by survey participants. This finding is consistent with the standard theory of welfare dependency.