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Do Public Program Benefits Crowd Out Private Transfers in Developing Countries? An Overview of Evidence from Social Protection Policies

Author

Listed:
  • Nikolov, Plamen

    (Harvard Institute for Quantitative Social Science)

  • Bonci, Matthew

    (University of Pennsylvania)

Abstract

Precipitated by rapid globalization, rising inequality, population growth, and longevity gains, social protection programs have been on the rise in developing countries in the last three decades. However, the introduction of public benefits could displace informal mechanisms for risk-protection, which are especially prevalent in developing countries. In this paper, we critically survey the recent empirical literature on crowd-out effects in response to public policies, specifically in the context of developing countries. We review and synthesize patterns from the behavioral response to various types of social protection programs. Furthermore, we specifically examine for heterogeneous treatment effects by important socioeconomic characteristics. We conclude by drawing on lessons from our synthesis of studies.

Suggested Citation

  • Nikolov, Plamen & Bonci, Matthew, 2020. "Do Public Program Benefits Crowd Out Private Transfers in Developing Countries? An Overview of Evidence from Social Protection Policies," IZA Policy Papers 154, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izapps:pp154
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    Citations

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    Cited by:

    1. David K Evans & Katrina Kosec, 2023. "Cash Transfers, Trust, and Inter-household Transfers: Experimental Evidence from Tanzania," The World Bank Economic Review, World Bank, vol. 37(2), pages 221-234.
    2. Nikolov, Plamen & Hossain, Md Shahadath, 2023. "Do pension benefits accelerate cognitive decline in late adulthood? Evidence from rural China," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 594-617.
    3. Ting Yin & Junchao Zhang, 2022. "More Schooling, More Generous? Estimating the Effect of Education on Intergenerational Transfers†," Asian Economic Journal, East Asian Economic Association, vol. 36(1), pages 22-46, March.
    4. Nakamura, Nobuyuki & Suzuki, Aya, 2022. "How Altruism Works during a Pandemic: Examining the Roles of Financial Support and Degrees of Individual Altruism on International Remittance," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322073, Agricultural and Applied Economics Association.
    5. Gelo, Dambala & Kollamparambil, Umakrishnan & Jeuland, Marc, 2023. "The causal effect of income on household energy transition: Evidence from old age pension eligibility in South Africa," Energy Economics, Elsevier, vol. 119(C).

    More about this item

    Keywords

    life cycle; social protection; pension; inter vivos transfers; middle-income and low-income countries; developing countries; crowd-out effect;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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