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Welfare programs and labor supply in developing countries: experimental evidence from Latin America

Author

Listed:
  • María Alzúa
  • Guillermo Cruces
  • Laura Ripani
Abstract
This study looks at the effect of welfare programs on work incentives and the adult labor supply in developing countries. The analysis builds on the experimental evaluations of three programs implemented in rural areas: Mexico’s Programa Nacional de Educación, Salud y Alimentación (PROGRESA), Nicaragua’s Red de Protección Social, and Honduras’ Programa de Asignación Familiar. Comparable results for the three countries indicate that the effects that the programs have had on the labor supply of participating adults have been mostly negative but are nonetheless small and not statistically significant. However, the evidence does point to the presence of other effects on labor markets. In the case of PROGRESA, there is a small positive effect on the number of hours worked by female beneficiaries and a sizeable increase in wages among male beneficiaries and a resulting increase in household labor income. Moreover, PROGRESA seems to have reduced female labor-force participation in ineligible households. These results imply that large-scale interventions may have broader equilibrium effects. Copyright Springer-Verlag Berlin Heidelberg 2013

Suggested Citation

  • 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.
  • Handle: RePEc:spr:jopoec:v:26:y:2013:i:4:p:1255-1284
    DOI: 10.1007/s00148-012-0458-0
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    More about this item

    Keywords

    Welfare programs; Income support; Labor supply; Work incentives; Conditional cash transfers; Randomized control trials; Developing countries; J08; J22; I38;
    All these keywords.

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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