Effect of Means-Tested Social Transfers on Labor Supply: Heads Versus Spouses—An Empirical Analysis of Work Disincentives in the Kyrgyz Republic

Original Article

Abstract

Popular perceptions that the provision of income transfers to poor households creates work disincentives prevail. Existing evidence is mixed and depends on the country, the type of transfer, and the population group analyzed. This paper empirically estimates potential work disincentives of a means-tested social transfer for adults with different household positions. Using data from the Kyrgyz Integrated Household Survey 2012, the analysis compares labor market outcomes for household heads and spouses using quasiexperimental methods to assess transfer effects on labor supply. Overall, beneficiaries have on average higher labor market participation rates, but results differ by household position and socioeconomic context. Household heads in beneficiary households are less likely to be economically active than similar nonbeneficiaries. Yet, spouses are more likely to be economically active. Moreover, outcomes depend on whether the household is located in the south or the north of the country.

Keywords

social transfers work disincentives intrahousehold allocation transition economy Kyrgyz Republic 

La perception populaire selon laquelle le transfert monétaire aux foyers pauvres crée une désincitation au travail reste dominante. Les preuves existantes sont mitigées et dépendent à la fois du pays, du type de transfert ainsi que du groupe de population ciblé. Cet article évalue de façon empirique la potentielle désincitation au travail provoquée par un transfert social, en fonction des ressources disponibles pour les adultes, et selon leur position au sein du foyer. En utilisant les données de l’enquête intégrée des foyers kirghizes de 2012, l’analyse compare les résultats du marché du travail pour les chefs de famille et pour leur conjoint avec des méthodes quasi expérimentales pour évaluer les effets de transfert sur l’offre de main-d’œuvre. Globalement, les bénéficiaires ont en moyenne des taux plus élevés de participation au marché du travail, mais les résultats diffèrent selon la position occupée au sein de ménage et selon le contexte socio-économique. Les chefs de famille des foyers bénéficiaires sont moins susceptibles d’avoir une activité économique que leurs homologues non-bénéficiaires. Pourtant, les conjoints sont plus susceptibles d’avoir une activité économique. De plus, les résultats varient selon que le ménage est situé dans le sud ou le nord du pays.

JEL Codes

I38 J22 

Notes

Acknowledgments

We thank the National Statistical Committee of the Kyrgyz Republic for the provision of the data.

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Copyright information

© European Association of Development Research and Training Institutes (EADI) 2018

Authors and Affiliations

  1. 1.UNU-MERIT/MGSOG, Maastricht UniversityMaastrichtThe Netherlands
  2. 2.Center for Social Policy Herman DeleeckUniversity of AntwerpAntwerpBelgium

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