 Evaluating the labor supply implications of a cash transfer program: Evidence from ChinaJie-Sheng Tan-Soo, Mingda Cheng and Shuai Chen Journal of Development Economics, 2025, vol. 176, issue C Abstract: This study evaluates the labor supply implications of China's Dibao program, one of the largest means-tested cash transfer initiatives globally. Leveraging its unique payment structure, which ensures a smooth income transition at the eligibility threshold, we employ a fuzzy regression discontinuity design to identify causal effects on employment outcomes. Despite the program's design to minimize disincentives, we find that Dibao beneficiaries are 46.2 % less likely to be employed after enrollment, with effects primarily driven by vulnerable groups, including the elderly and individuals with low educational attainment. Further analysis reveals significant labor supply reductions among low-income-contributing household members, while higher-income members remain unaffected. Our findings contribute to the discourse on cash transfers by highlighting how program design can balance social protection with labor market efficiency, offering insights for policymakers seeking to mitigate work disincentives while ensuring support for vulnerable populations. Keywords: Cash transfers program; Labor supply; Employment incentives; China; Means-tested program (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:176:y:2025:i:c:s0304387825000641 DOI: 10.1016/j.jdeveco.2025.103513 Access Statistics for this article Journal of Development Economics is currently edited by M. R. Rosenzweig More articles in Journal of Development Economics from Elsevier |
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