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Social Transfers, Labor Supply and Poverty Reduction: The Case of Albania

Author

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  • Dabalen, Andrew

    () (The World Bank)

  • Kilic, Talip

    () (The World Bank)

  • Wane, Waly

    () (The World Bank)

Abstract

In 1993, in response to persistent unemployment, and rising poverty and social unrest, the government of Albania introduced an anti-poverty program, namely Ndihma Ekonomike; in 1995 it was extended to all poor households. This paper estimates the separate effects of participation in this income support program and the old-age pension program on objective and subjective measures of household poverty. The analysis uses the nationally representative Albanian Living Standards Measurement Surveys carried out in 2002 and 2005. Using propensity score matching methods, the paper finds that Ndihma Ekonomike households, particularly urban residents, have lower per capita consumption and are more likely to be discontented with their lives, financial situation, and consumption levels than their matched comparators. In contrast, households receiving pensions are not significantly different from their matched comparators in reference to the same set of outcomes. The paper finds that the negative impact of Ndihma Ekonomike participation on welfare is driven by a negative labor supply response among work-eligible individuals. This negative labor response is larger among women and urban residents. In contrast to Ndihma Ekonomike, the receipt of old-age pension income transfers does not significantly impact the labor supply of prime-age individuals living in pension households

Suggested Citation

  • 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.
  • Handle: RePEc:wbk:wbrwps:4783
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    References listed on IDEAS

    as
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    4. Victoria Hosegood & Anne Case & Cally Ardington, 2009. "Labor Supply Responses to Large Social Transfers: Longitudinal Evidence from South Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 22-48, January.
    5. Case, Anne & Deaton, Angus, 1998. "Large Cash Transfers to the Elderly in South Africa," Economic Journal, Royal Economic Society, vol. 108(450), pages 1330-1361, September.
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    Cited by:

    1. Leibbrandt, Murray & Lilenstein, Kezia & Shenker, Callie & Woolard, Ingrid, 2013. "The influence of social transfers on labour supply: A South African and international review," SALDRU Working Papers 112, Southern Africa Labour and Development Research Unit, University of Cape Town.
    2. Independent Evaluation Group, 2014. "Social Safety Nets and Gender : Learning from Impact Evaluations and World Bank Projects," World Bank Publications, The World Bank, number 21365.
    3. repec:spr:izalpo:v:6:y:2017:i:1:d:10.1186_s40173-017-0089-x is not listed on IDEAS
    4. Tomini, Sonila & Groot, Wim, 2012. "Paying informally for public health care in Albania: scarce resources or governance failure?," MERIT Working Papers 070, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Lucia Mangiavacchi & Paolo Verme, 2009. "Evaluating Pro-poor Transfers When Targeting is Weak: The Albanian Ndihma Ekonomike Program Revisited," Working Papers - Economics wp2009_08.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.

    More about this item

    Keywords

    Social protection; Labor supply; Albania;

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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