The Employment Effects of Generous and Unconditional Cash Support

Timo Verlaat, Federico Todeschini and Xavier Ramos ()
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Timo Verlaat: Utrecht School of Economics
Federico Todeschini: Pompeu Fabra University
Xavier Ramos: Universitat Autònoma de Barcelona

No 15976, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: While unconditional cash transfers have been studied extensively in developing countries, little is known about their effects in a wealthier context. Through a randomized controlled trial, we study the employment effects of a generous and unconditional transfer targeting low-income families in Spain. Two years into the program, subjects assigned to treatment are 20 percent less likely to work than subjects assigned to a control group. Assignment to an activation plan does not attenuate adverse effects; a more lenient transfer withdrawal rate does. It appears that effects are driven by subjects with children, suggesting substitution of labour for care tasks.

Keywords: welfare reform; cash transfer; basic income; policy evaluation; RCT (search for similar items in EconPapers)
JEL-codes: C93 H53 I38 J64 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2023-02
New Economics Papers: this item is included in nep-exp and nep-lab
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