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Type Working Paper - CSSR Working Paper No 58
Title Social networks, extended families, and consumption smoothing: Field evidence from South Africa
Issue 58
Publication (Day/Month/Year) 2003
Page numbers 1-43
URL http://www.cssr.uct.ac.za/sites/cssr.uct.ac.za/files/pubs/wp58.pdf
This paper analyses the joint determination of social network membership and employment status in stochastic environments, using data from a new survey undertaken in KwaZulu Natal province as well as ethnographic evidence. The results show strong links between membership of social networks and employment. In particular, being a member of a ROSCA or community-based burial society smooths positive as well as negative shocks both intertemporally as well as across individual members. The results also show that having access to a stable income source such as a social pension enhances the employment probabilities of individuals who reside in households recently subjected to health shocks. Where access to such nonstochastic income is rare, membership of ROSCAs and community based burial societies is common.

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