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How much is too much: Does the size of income support transfers affect labor supply?

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  • Prifti, Ervin
  • Estruch, Elisenda
  • Daidone, Silvio
  • Davis, Benjamin

Abstract

Cash transfer programs pursue mainly protective objectives, but can also impact rural livelihoods by inducing investments in productive activities and changing household labor allocation. We adopt a continuous treatment approach to quantify how households’ labor supply responds to transfer size. We find a shift from paid labor to own farm labor and find that the transfer size is well within a level that would have disincentive effects on time spent on own farm activities. The switch from paid to own farm labor occurs at lower levels of transfers for labor-constrained households, and at higher levels for non-labor constrained households.

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  • Prifti, Ervin & Estruch, Elisenda & Daidone, Silvio & Davis, Benjamin, 2019. "How much is too much: Does the size of income support transfers affect labor supply?," Journal of Policy Modeling, Elsevier, vol. 41(1), pages 179-196.
    • Handle: RePEc:eee:jpolmo:v:41:y:2019:i:1:p:179-196
    DOI: 10.1016/j.jpolmod.2018.08.005
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    Cited by:

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    2. Mastrorillo, Marina & Scognamillo, Antonio & Ginet, Camille & Pietrelli, Rebecca & d’Errico, Marco & Ignaciuk, Adriana, 2022. "Enhancing refugees’ self-reliance in Uganda – The role of cash and food assistance," ESA Working Papers 324702, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    3. Bryan, Gharad & Chowdhury, Shyamal & Mobarak, Ahmed Mushfiq & Morten, Melanie & Smits, Joeri, 2021. "Encouragement and Distortionary Effects of Conditional Cash Transfers," IZA Discussion Papers 14326, Institute of Labor Economics (IZA).
    4. Silvio Daidone & Benjamin Davis & Sudhanshu Handa & Paul Winters, 2019. "The Household and Individual-Level Productive Impacts of Cash Transfer Programs in Sub-Saharan Africa," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(5), pages 1401-1431.
    5. Boto-García, David & Pérez, Levi, 2023. "The effect of high-speed rail connectivity and accessibility on tourism seasonality," Journal of Transport Geography, Elsevier, vol. 107(C).

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    More about this item

    Keywords

    Cash transfers; Labor supply; Continuous treatment approach; IPW-regression;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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