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Worker retraining and transfer payments: The political economy of social protection

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  • Sanjay Jain

Abstract

We conduct an incentive-theoretical analysis of political economy considerations in the design of social protection programmes in developing countries to accompany economic reforms. We focus on two aspects of social protection—the provision of redistribution and retraining—that arguably characterize many reform packages. We analyse the interaction of compensatory redistribution and retraining programmes, and demonstrate that the provision of redistributive programmes might distort incentives for individuals to undertake worker retraining.

Suggested Citation

  • Sanjay Jain, 2017. "Worker retraining and transfer payments: The political economy of social protection," WIDER Working Paper Series wp-2017-44, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2017-44
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2017-44.pdf
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