How much is too much: Does the size of income support transfers affect labor supply? |
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Authors: | Ervin Prifti Elisenda Estruch Silvio Daidone Benjamin Davis |
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Institution: | Food and Agriculture Organization of the United Nations, Rome, Italy |
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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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Keywords: | C21 J22 H24 Cash transfers Labor supply Continuous treatment approach IPW-regression |
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