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Windfalls and work requirements: Evidence from a field experiment in Malawi

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Abstract

Though the differential impacts of earned and unearned income have long been of interest to economists and policymakers, the study of this question is often conflated by other differences between the income streams. We conduct a field experiment in Malawi in which we exaimine the differential short-term effect of earned and unearned income on the allocation of expenditures and labor supply, holding all other factors constant. All participants receive an equal size cash payment and make the same time investment; half are required to work, and half are not. We find little evidence that income source affects the allocation of expenditures across categories, but do find that the work requirement increases overall expenditures immediately following the payment. Conversely, the work requirement results in a reallocation of labor supply away from household work in the very short term.

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  • Kate Ambler & Susan Godlonton, 2019. "Windfalls and work requirements: Evidence from a field experiment in Malawi," Department of Economics Working Papers 2019-25, Department of Economics, Williams College.
    • Handle: RePEc:wil:wileco:2019-25
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    References listed on IDEAS

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    1. 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.
    2. Ambler, Kate, 2015. "Don't tell on me: Experimental evidence of asymmetric information in transnational households," Journal of Development Economics, Elsevier, vol. 113(C), pages 52-69.
    3. Ambler, Kate & de Brauw, Alan & Godlonton, Susan, 2018. "Agriculture support services in Malawi: Direct effects, complementarities, and time dynamics:," IFPRI discussion papers 1725, International Food Policy Research Institute (IFPRI).
    4. 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;European Society for Population Economics, vol. 26(4), pages 1255-1284, October.
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    Keywords

    Labor Supply; Agriculture; Malawi;
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