Unexpected Work Incentives: How Cash Transfers Raise Refugee Men's Labor Supply

Aysun Aygün, Murat Kırdar, Murat Koyuncu and Quentin Stoeffler

No 26221, RFBerlin Discussion Paper Series from ROCKWOOL Foundation Berlin (RFBerlin)

Abstract: A central concern with social and humanitarian assistance is that unconditional cash transfers might discourage work among recipients. Refugees, however, differ from the chronically poor households in most cash-transfer studies. Displaced from once-stable livelihoods, many retain skills and labor-force attachment that transfers might help reactivate. We study this question using the largest humanitarian cash transfer scheme in the world, the Emergency Social Safety Net (ESSN) in Turkey, which for most of the past decade hosted more refugees than any other country. Drawing on a survey designed to represent Turkey's refugee population, we exploit the program's dependency-ratio eligibility rule in a regression discontinuity design to estimate the effect of cash transfers on refugee employment. Far from discouraging work, we find that receiving cash transfers increases the probability that any man in the household works by 13.2 percentage points and the share of working men by 19.3 percentage points. We find no evidence of an effect on refugee women's already-low labor supply. A design-based local-randomization analysis around the eligibility cutoff corroborates these responses with exact finite-sample inference, implying effects of 9.8 and 17.4 percentage points, respectively. Turning to mechanisms, we find that the transfers improve access to information, reduce reliance on harmful food-coping strategies, and raise enrollment in Turkish language courses. The transfers also raise spending on education. These findings suggest that cash transfers relax the liquidity and information constraints that refugees face in the labor market rather than inducing a shift toward leisure.

Keywords: humanitarian assistance; forced displacement; unconditional cash transfers; social protection; work disincentives; regression discontinuity design; Turkey (search for similar items in EconPapers)
JEL-codes: I38 J21 J22 J61 O15 (search for similar items in EconPapers)
Date: 2026-08
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