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The effect of unconditional cash transfers on adult labour supply: A unitary discrete choice model for the case of Ecuador

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  • Mideros, A.

    (UNU-MERIT)

  • O'Donoghue, C.

    (UNU-MERIT, and Teagasc)

Abstract

We examine the effect of unconditional cash transfers by a unitary discrete labour supply model. We argue that there is no negative income effect of social transfers in the case of poor adults because leisure could not be assumed to be a normal good under such conditions. Using data from the national employment survey of Ecuador ENEMDUR we estimate the effect of the Bono de Desarrollo Humano BDH. Results show that cash transfers, unconditional in labour, do not produce labour disincentives in the case of household heads, but may be paying for housework and childcare provided by partners and single adults. However, labour market and care work gender inequality must be addressed by complementary policies.

Suggested Citation

  • Mideros, A. & O'Donoghue, C., 2014. "The effect of unconditional cash transfers on adult labour supply: A unitary discrete choice model for the case of Ecuador," MERIT Working Papers 2014-063, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2014063
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    Cited by:

    1. María Gabriela Palacio Ludeña, 2019. "Institutionalizing Segregation: Women, Conditional Cash Transfers, and Paid Employment in Southern Ecuador," Population and Development Review, The Population Council, Inc., vol. 45(S1), pages 245-273, December.
    2. María Gabriela Palacio, 2016. "Institutionalizing segregation: Conditional cash transfers and employment choices," WIDER Working Paper Series wp-2016-91, World Institute for Development Economic Research (UNU-WIDER).
    3. Daniel Sánchez-Piñol Yulee, 2023. "Show Me the Money! The Effects of a Conditional Cash-Transfer Program on the Labor Market in Ecuador," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 38(Winter 20), pages 1-28.
    4. Guillermo Cruces & Gary S. Fields & David Jaume & Mariana Viollaz, 2015. "The growth-employment-poverty nexus in Latin America in the 2000s: Ecuador country study," WIDER Working Paper Series wp-2015-076, World Institute for Development Economic Research (UNU-WIDER).
    5. Verena Löffler, 2021. "Questioning the feasibility and justice of basic income accounting for migration," Politics, Philosophy & Economics, , vol. 20(3), pages 273-314, August.
    6. Guillermo Cruces & Gary S. Fields & David Jaume & Mariana Viollaz, 2015. "The growth-employment-poverty nexus in Latin America in the 2000s: Ecuador country study," WIDER Working Paper Series 076, World Institute for Development Economic Research (UNU-WIDER).
    7. Tadeusz Zienkiewicz & Aleksandra Zalewska & Ewa Zienkiewicz, 2023. "Spatial Diversity and Impact of Selected Factors on Women’s Labour Force Participation Rate in Poland during 2000–2020," Sustainability, MDPI, vol. 15(17), pages 1-16, August.
    8. María Gabriela Palacio, 2016. "Institutionalizing segregation Conditional cash transfers and employment choices," Working Paper Series UNU-WIDER Working Paper w, World Institute for Development Economic Research (UNU-WIDER).
    9. María Gabriela Palacio, 2016. "Institutionalizing segregation: Conditional cash transfers and employment choices," WIDER Working Paper Series 091, World Institute for Development Economic Research (UNU-WIDER).
    10. Palermo Kuss Ana Helena & Neumärker K. J. Bernhard, 2018. "Modelling the Time Allocation Effects of Basic Income," Basic Income Studies, De Gruyter, vol. 13(2), pages 1-15, December.

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    More about this item

    Keywords

    Labour market; Labour supply; Cash transfers; Unconditional cash transfers; Income effects; Disincentives;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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