Advanced Search
MyIDEAS: Login to save this paper or follow this series

The influence of social transfers on labour supply: A South African and international review

Contents:

Author Info

  • Leibbrandt, Murray

    ()
    (SALDRU, School of Economics, University of Cape Town)

  • Lilenstein, Kezia

    ()
    (SALDRU, School of Economics, University of Cape Town)

  • Shenker, Callie

    ()
    (SALDRU, School of Economics, University of Cape Town)

  • Woolard, Ingrid

    ()
    (SALDRU, School of Economics, University of Cape Town)

Abstract

This paper surveys the South African and international literature surrounding the impact of cash transfers on labour supply. We find that although social transfers are condemned for creating state-dependency, the reality is that their effect on labour force participation is both ambiguous and dependent on a number of factors. At the most basic level, transfers either decrease participation by transferring time from work towards leisure activities, or increase participation by covering the fixed costs and credit constraints associated with working, particularly for women, those with low levels of education and other vulnerable groups. Child-support grants may cover childcare or education costs, thus allowing mother's to enter the labour force. Grants can also have an effect on the labour supply of non-recipient household members, particularly when the recipient is a female, as women tend to allocate funds more freely throughout the household. The State Old Age Pension has been seen to induce both in and out-migration of household members. Programme design may also play a role, as means-testing can induce potential beneficiaries to reduce labour participation in order to become eligible for benefits. The education and health-care conditions attached to many transfers can also increase human capital formation and therefore create a long-term positive impact on labour market participation.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.opensaldru.uct.ac.za/bitstream/handle/11090/670/2013_112.pdf?sequence=1
File Function: Full text
Download Restriction: no

Bibliographic Info

Paper provided by Southern Africa Labour and Development Research Unit, University of Cape Town in its series SALDRU Working Papers with number 112.

as in new window
Length:
Date of creation: 2013
Date of revision:
Handle: RePEc:ldr:wpaper:112

Contact details of provider:
Postal: Leslie Social Science Building, Private Bag, Rondebosch, 7701
Phone: +27 21 650 5696
Fax: +27 21 650 5697
Email:
Web page: http://www.saldru.uct.ac.za/
More information through EDIRC

Related research

Keywords: cash transfer; child grants; South Africa;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Jean Kimmel, 1998. "Child Care Costs As A Barrier To Employment For Single And Married Mothers," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 287-299, May.
  2. Terracol, Antoine, 2009. "Guaranteed minimum income and unemployment duration in France," Labour Economics, Elsevier, vol. 16(2), pages 171-182, April.
  3. Manuela Angelucci & Giacomo De Giorgi, 2009. "Indirect Effects of an Aid Program: How Do Cash Transfers Affect Ineligibles' Consumption?," American Economic Review, American Economic Association, vol. 99(1), pages 486-508, March.
  4. Stephan Klasen & Ingrid Woolard, 2009. "Surviving Unemployment Without State Support: Unemployment and Household Formation in South Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 18(1), pages 1-51, January.
  5. Vimal Ranchhod, 2009. "Household responses to adverse income shocks: Pensioner out-migration and mortality in South Africa," Working Papers 133, Economic Research Southern Africa.
  6. Charles Michalopoulos & Philip K. Robins & Irwin Garfinkel, 1992. "A Structural Model of Labor Supply and Child Care Demand," Journal of Human Resources, University of Wisconsin Press, vol. 27(1), pages 166-203.
  7. Anne Case & Angus Deaton, 1996. "Large Cash Transfers to the Elderly in South Africa," NBER Working Papers 5572, National Bureau of Economic Research, Inc.
  8. Sophie Mitra, 2005. "Disability and Social Safety Nets in Developing Countries," World Bank Other Operational Studies 11783, The World Bank.
  9. Thomas Lemieux & Kevin Milligan, 2004. "Incentive Effects of Social Assistance: A Regression Discontinuity Approach," NBER Working Papers 10541, National Bureau of Economic Research, Inc.
  10. María Alzúa & Guillermo Cruces & Laura Ripani, 2013. "Welfare programs and labor supply in developing countries: experimental evidence from Latin America," Journal of Population Economics, Springer, vol. 26(4), pages 1255-1284, October.
  11. Dabalen, Andrew & Kilic, Talip & Wane, Waly, 2008. "Social Transfers, Labor Supply and Poverty Reduction: The Case of Albania," Policy Research Working Paper Series 4783, The World Bank.
  12. Ghazala Naz, 2004. "The impact of cash-benefit reform on parents’ labour force participation," Journal of Population Economics, Springer, vol. 17(2), pages 369-383, 06.
  13. Sophie Mitra, 2009. "Disability Screening and Labor Supply: Evidence from South Africa," American Economic Review, American Economic Association, vol. 99(2), pages 512-16, May.
  14. Cally Ardington & Anne Case & Victoria Hosegood, 2007. "Labor Supply Responses To Large Social Transfers: Longitudinal Evidence From South Africa," Working Papers 1021, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
  15. Marianne Bertrand & Douglas Miller & Sendhil Mullainathan, 2000. "Public Policy and Extended Families: Evidence from South Africa," NBER Working Papers 7594, National Bureau of Economic Research, Inc.
  16. Fernando Hoces de la Guardia & Andrés Hojman & Osvaldo Larrañaga, 2011. "Evaluating the Chile Solidario program: results using the Chile Solidario panel and the administrative databases," Estudios de Economia, University of Chile, Department of Economics, vol. 38(1 Year 20), pages 129-168, June.
  17. Sophie Mitra, 2009. "Disability Cash Transfers in the Context of Poverty and Unemployment: the Case of South Africa," Fordham Economics Discussion Paper Series dp2009-08, Fordham University, Department of Economics.
  18. Bargain, Olivier & Doorley, Karina, 2011. "Caught in the trap? Welfare's disincentive and the labor supply of single men," Journal of Public Economics, Elsevier, vol. 95(9-10), pages 1096-1110, October.
  19. repec:hal:cesptp:hal-00607219 is not listed on IDEAS
  20. David H. Autor & Mark G. Duggan, 2003. "The Rise In The Disability Rolls And The Decline In Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 157-205, February.
  21. Standing Guy, 2008. "How Cash Transfers Promote the Case for Basic Income," Basic Income Studies, De Gruyter, vol. 3(1), pages 1-30, July.
  22. Posel, Dorrit & Fairburn, James A. & Lund, Frances, 2006. "Labour migration and households: A reconsideration of the effects of the social pension on labour supply in South Africa," Economic Modelling, Elsevier, vol. 23(5), pages 836-853, September.
  23. Sahn, David E & Alderman, Harold, 1996. "The Effect of Food Subsidies on Labor Supply in Sri Lanka," Economic Development and Cultural Change, University of Chicago Press, vol. 45(1), pages 125-45, October.
  24. Tom Kornstad & Thor Thoresen, 2007. "A discrete choice model for labor supply and childcare," Journal of Population Economics, Springer, vol. 20(4), pages 781-803, October.
  25. Fernando Borraz & Nicolás González, 2009. "Impact of the Uruguayan Conditional Cash Transfer Program," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 46(134), pages 243-271.
  26. Greenberg, David, 1983. "Some labor market effects of labor supply responses to transfer programs," Socio-Economic Planning Sciences, Elsevier, vol. 17(4), pages 141-151.
  27. Katheryn Eyal & Malcolm Kewsell, 2007. "Identfying Pure-Income Effects in an Empirical Model of Labour Supply: the case of the South African Social Pension," SALDRU Working Papers 19, Southern Africa Labour and Development Research Unit, University of Cape Town.
  28. Nada Eissa & Hilary Williamson Hoynes, 2000. "The Earned Income Tax Credit and the Labor Supply of Married Couples," Public Economics 9912001, EconWPA.
  29. Pål Schøne, 2004. "Labour supply effects of a cash-for-care subsidy," Journal of Population Economics, Springer, vol. 17(4), pages 703-727, December.
  30. Maluccio, John A. & Flores, Rafael, 2005. "Impact evaluation of a conditional cash transfer program: the Nicaraguan Red de Protección Social," Research reports 141, International Food Policy Research Institute (IFPRI).
  31. Jere R. Behrman & Susan W. Parker & Petra E. Todd, 2005. "Long-Term Impacts of the Oportunidades Conditional Cash Transfer Program on Rural Youth in Mexico," Ibero America Institute for Econ. Research (IAI) Discussion Papers 122, Ibero-America Institute for Economic Research.
  32. Eissa, Nada & Liebman, Jeffrey B, 1996. "Labor Supply Response to the Earned Income Tax Credit," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 605-37, May.
  33. Fabio Veras Soares & Rafael Perez Ribas & Guilherme Issamu Hirata, 2008. "Achievements and Shortfalls of Conditional Cash Transfers: Impact Evaluation of Paraguay?s Tekoporã Programme," Publications 3, International Policy Centre for Inclusive Growth.
  34. Tiago Cavalcanti & Márcio Corrêa, 2010. "Cash Transfers and the Labor Market," Revista Brasileira de Economia, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 64(2), pages 175-190, June.
  35. Jan Klavus, 1999. "Health care and economic well-being: estimating equivalence scales for public health care utilization," Health Economics, John Wiley & Sons, Ltd., vol. 8(7), pages 613-625.
  36. Skoufias, Emmanuel & Gonzalez-Cossio, Teresa, 2008. "The Impacts of Cash and In-Kind Transfers on Consumption and Labor Supply: Experimental Evidence from Rural Mexico," Policy Research Working Paper Series 4778, The World Bank.
  37. Pierre Lefebvre & Philip Merrigan, 2008. "Child-Care Policy and the Labor Supply of Mothers with Young Children: A Natural Experiment from Canada," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 519-548, 07.
  38. Clarissa Gondim Teixeira, 2010. "A Heterogeneity Analysis of the Bolsa Família Programme Effect on Men and Women?s Work Supply," Working Papers 61, International Policy Centre for Inclusive Growth.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ldr:wpaper:112. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alison Siljeur).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.