The impact of AIDS on intergenerational support in South Africa: Evidence from the Cape Area Panel Study.

This study uses panel data from Cape Town to document the role played by aging parents in caring for grandchildren who lose parents due to illnesses such as AIDS. We quantify the probabilities that older adults and their adult children provide financial support to orphaned grandchildren. We find significant transfers of public and private funds to older adults caring for orphans. Perhaps because of these transfers we find no differences in expenditure patterns between households with orphans and other older adult households. We also find no impact of either the death of a child or taking in orphaned grandchildren on adult well-being as measured by ability to work, depression, or self reported health. Our findings suggest that the combined public and private safety net in South Africa mitigates many of the consequences older adults could suffer when an adult child dies and leaves behind grandchildren needing care.