The lack of a state pension in Malawi is encouraging child labour, according to a study by Leandro De Magalhaes, to be presented at the Royal Economic Society''s annual conference at the University of Bristol in April 2017.
The study notes that in the absence of state pensions, households headed by an elderly person fall back on self-farming to sustain their food intake. This has two effects: first, nutritional quality declines, as self-farmed food replaces food bought on the market; and second, school-age children in these households work more hours in the field, and are less likely to attend school, compared with their peers who live in households in which the head is not elderly.
A state pension could increase the likelihood that a Malawian child attends school by 6%, and reduce the hours worked by school-age children by 30%, the research concludes. The author comments: ''Using international aid to finance state pensions would increase the overall level of school attendance in the country and therefore, help to kick-start economic growth.''
We find evidence that child labour is used in poor rural sub-Saharan Africa to help finance the consumption of the elderly. Introducing old-age pensions – through international aid, for example – may increase the likelihood that a child attends school by 6%, reduce the hours worked by school-age children by 30%, and improve the nutrition of all household members.
Our main finding is that consumption in old age in poor rural sub-Saharan Africa is sustained by shifting to self-farmed staple food, as opposed to traditional savings mechanisms or food gifts. This entails two important costs:
• First, there is a loss of human capital as children in households with elderly members are diverted away from school and into producing self-farmed food.
• Second, a diet largely concentrated in staple food (for example, maize in Malawi) in old age results in a loss of nutritional quality for all members of households headed by the elderly.
We study how subsistence farmers in one of sub-Saharan African''s poorest countries, Malawi, cope with old age. Our data come from the nationally representative household survey for Malawi, the Living Standards Measurement Study, which is collected and organised in conjunction between local governments and the World Bank.
The elderly in Malawi cannot count on the state as there is no state pension. They cannot count on the market either as access to bank accounts, formal insurance and private pensions is negligible. They cannot count on selling their main asset, land, as there is no market for it (most land is inherited or allocated by local chiefs). They cannot count on their neighbour as – surprisingly – we find that food received as gifts do not increase with the age of the household head.
We find that their coping mechanism is to move away from the market and focus on producing self-farmed food. Self-farmed food is the only expenditure item that increases with the age of the household head. Food items purchased in the market decrease with age, and so do non-food items.
Remarkably, these households are able to maintain a stable caloric intake in old age, but at a cost. We identify two of these costs:
• The first cost is that nutritional quality decreases in old age as their diet becomes more dependent on their staple self-farmed foods – maize in the case of Malawi.
• The second cost is that the school-age children in these households work more hours in the field and are less likely to attend school compared with their peers who live in households in which the head is not elderly.
Our results suggest that if international aid were used to finance state pensions, a direct and an indirect potential benefit would ensue:
• The direct benefit would be improved nutrition among members of households headed by the elderly, children included.
• The indirect benefit would be an increase in school attendance by children in those households. This would increase the overall level of schooling in the country and therefore, help kick-start economic growth.
Consumption and Expenditure in Sub-Saharan Africa: The Role of Self-Farming over the Lifecycle – Dr Leandro De Magalhaes