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

Author

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  • Franziska Gassmann

    (UNU-MERIT/MGSOG, Maastricht University)

  • Lorena Zardo Trindade

    (University of Antwerp)

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.

Suggested Citation

  • Franziska Gassmann & Lorena Zardo Trindade, 2019. "Effect of Means-Tested Social Transfers on Labor Supply: Heads Versus Spouses—An Empirical Analysis of Work Disincentives in the Kyrgyz Republic," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(2), pages 189-214, April.
    • Handle: RePEc:pal:eurjdr:v:31:y:2019:i:2:d:10.1057_s41287-018-0142-7
    DOI: 10.1057/s41287-018-0142-7
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    More about this item

    Keywords

    Social transfers; Work disincentives; Intrahousehold allocation; Transition economy; Kyrgyz Republic;
    All these keywords.

    JEL classification:

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

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