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How to Best Fight Poverty: The Uneven Ex-post Effects of Conditional and Unconditional Cash Transfers on Labor Earnings

Author

Listed:
  • Aparicio Fenoll, Ainoa

    (University of Turin)

  • Quaranta, Roberto

    (Collegio Carlo Alberto)

Abstract

Programs to fight poverty aim at allowing individuals to support themselves ex-post, when they are not part of the program anymore. We compare the ex-post effects of conditional and unconditional cash transfer programs on labor income. We use an experiment where low-income individuals are randomly assigned to three groups: no treatment, unconditional cash transfer, and cash transfer conditional on reemployment training. We exploit Social Security data, including all registered labor contracts in Italy. Results show that conditional cash transfers have positive and sizeable effects on labor income, both contemporaneous and ex-post effects. These effects last at least two years and are led by males. Unconditional cash transfers have no impact on labor income.

Suggested Citation

  • Aparicio Fenoll, Ainoa & Quaranta, Roberto, 2022. "How to Best Fight Poverty: The Uneven Ex-post Effects of Conditional and Unconditional Cash Transfers on Labor Earnings," IZA Discussion Papers 15658, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15658
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    References listed on IDEAS

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    Cited by:

    1. Sauval, Maria & Duncan, Greg J. & Gennetian, Lisa A. & Magnuson, Katherine A. & Fox, Nathan A. & Noble, Kimberly G. & Yoshikawa, Hirokazu, 2024. "Unconditional cash transfers and maternal employment: Evidence from the Baby’s First Years study," Journal of Public Economics, Elsevier, vol. 236(C).
    2. Verlaat, Timo & Todeschini, Federico & Ramos, Xavier, 2023. "The Employment Effects of Generous and Unconditional Cash Support," IZA Discussion Papers 15976, Institute of Labor Economics (IZA).
    3. Xavier Ramos & Timo Verlaat & Federico Todeschini, 2023. "The Employment Effects of Generous and Unconditional Cash Support," Working Papers 638, ECINEQ, Society for the Study of Economic Inequality.

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    More about this item

    Keywords

    cash transfers; conditionality; poverty; social security data;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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