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The effect of unconditional cash transfers on adult labour supply: A unitary discrete choice model for the case of Ecuador

Andrés Mideros and Cathal O'Donoghue

No 2014-063, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: We examine the effect of unconditional cash transfers by a unitary discrete labour supply model. We argue that there is no negative income effect of social transfers in the case of poor adults because leisure could not be assumed to be a normal good under such conditions. Using data from the national employment survey of Ecuador ENEMDUR we estimate the effect of the Bono de Desarrollo Humano BDH. Results show that cash transfers, unconditional in labour, do not produce labour disincentives in the case of household heads, but may be paying for housework and childcare provided by partners and single adults. However, labour market and care work gender inequality must be addressed by complementary policies.

Keywords: Labour market; Labour supply; Cash transfers; Unconditional cash transfers; Income effects; Disincentives (search for similar items in EconPapers)
JEL-codes: H24 H30 J22 O12 (search for similar items in EconPapers)
Date: 2014-07-31
New Economics Papers: this item is included in nep-dcm, nep-dev and nep-ltv
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Citations: View citations in EconPapers (7)

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Journal Article: The Effect of Unconditional Cash Transfers on Adult Labour Supply: A Unitary Discrete Choice Model for the Case of Ecuador (2015) Downloads
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