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Cash Transfers and Labor Supply: New Evidence on Impacts and Mechanisms

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  • Nguyen, Cuong Viet
  • Tarp, Finn

Abstract

We study the impact of a national cash transfer program in Vietnam on labor supply using large household surveys and a regression-discontinuity design based on discontinuity in age eligibility. We do not find evidence of a disincentive effect of the cash transfer on labor supply for adults aged 15-64. More importantly, we find robust evidence that the transfer program causes the adults to move from self-employed non-farm work to wage-paying jobs. A likely mechanism is that the transfer program reduces the labor force participation of older people, and they help housework and childcare for younger adults to have wage-paying jobs.

Suggested Citation

  • Nguyen, Cuong Viet & Tarp, Finn, 2023. "Cash Transfers and Labor Supply: New Evidence on Impacts and Mechanisms," GLO Discussion Paper Series 1243, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:1243
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    More about this item

    Keywords

    Cash transfer; social security; employment; labor market participation; Vietnam;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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