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Social Policies and Labor Market Outcomes in Latin America and the Caribbean: A Review of the Existing Evidence

Author

Listed:
  • Mariano Bosch
  • Marco Manacorda
Abstract
Latin America and the Caribbean have become in the last decade or so a formidable laboratory for the design and implementation of innovative social policies. In the face of an unprecedented surge in the number of non-contributory social assistance benefit programs in the region, there is a renewed interest - among policy makers and academics alike - as to whether such programs have "perverse" labor market effects, in particular discouraging participation and formal employment. After having revisited the theoretical arguments behind this concern, this paper reviews the existing quasi experimental empirical evidence for the region. Our reading of the evidence suggests that, consistent with zero income elasticity of leisure among the poor, social assistance has no large significant effects on participation and overall employment, other than possibly among the elderly. Some particular policies are, however, generating a substitution away from formal to informal employment.

Suggested Citation

  • Mariano Bosch & Marco Manacorda, 2012. "Social Policies and Labor Market Outcomes in Latin America and the Caribbean: A Review of the Existing Evidence," CEP Occasional Papers 32, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepops:32
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Carla Canelas & Miguel Niño-Zarazúa, 2022. "Informality and Pension Reforms in Bolivia: The Case of Renta Dignidad," Journal of Development Studies, Taylor & Francis Journals, vol. 58(7), pages 1436-1458, July.
    2. Joan Vilá, 2019. "Respuestas en los ingresos frente a un programa de transferencias monetarias: evidencia de un notch a partir de registros administrativos de Uruguay," Documentos de Trabajo (working papers) 19-07, Instituto de Economía - IECON.
    3. Marcelo Bergolo & Guillermo Cruces, 2014. "Work and tax evasion incentive effects of social insurance programs. Evidence from an employment-based benefit extension," CEDLAS, Working Papers 0161, CEDLAS, Universidad Nacional de La Plata.
    4. Mónica Jiménez-Martínez & Maribel Jiménez-Martínez, 2019. "Effects of Argentine Students’ Support Program on Labor Transitions and Job Quality of Young People," Ensayos de Economía 17540, Universidad Nacional de Colombia Sede Medellín.
    5. Salehi-Isfahani, Djavad & Mostafavi-Dehzooei, Mohammad H., 2018. "Cash transfers and labor supply: Evidence from a large-scale program in Iran," Journal of Development Economics, Elsevier, vol. 135(C), pages 349-367.
    6. Ciula, Raffaele, 2022. "Impacts of Bolsa Familia Program on multidimensional poverty," MPRA Paper 115752, University Library of Munich, Germany.
    7. Verónica Amarante & Martín Brun, 2018. "Cash Transfers in Latin America: Effects on Poverty and Redistribution," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2018), pages 1-31, November.
    8. Franziska Gassmann & Lorena Zardo Trindade, 2019. "Effect of Means-Tested Social Transfers on Labor Supply: Heads Versus Spouses—An Empirical Analysis of Work Disincentives in the Kyrgyz Republic," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(2), pages 189-214, April.
    9. Verónica Amarante & Martín Lavalleja & Luana Méndez, 2023. "Tarjeta Uruguay Social: diseño, implementación y posibles efectos," Documentos de Trabajo (working papers) 23-11, Instituto de Economía - IECON.
    10. Garganta, Santiago & Gasparini, Leonardo, 2015. "The impact of a social program on labor informality: The case of AUH in Argentina," Journal of Development Economics, Elsevier, vol. 115(C), pages 99-110.
    11. Bergolo, Marcelo & Galván, Estefanía, 2018. "Intra-household Behavioral Responses to Cash Transfer Programs. Evidence from a Regression Discontinuity Design," World Development, Elsevier, vol. 103(C), pages 100-118.
    12. Bergolo, M. & Cruces, G., 2021. "The anatomy of behavioral responses to social assistance when informal employment is high," Journal of Public Economics, Elsevier, vol. 193(C).
    13. Bosch, Mariano & Guajardo, Jarret, 2012. "Labor Market Impacts of Non-Contributory Pensions: The Case of Argentina's Moratorium," IDB Publications (Working Papers) 4094, Inter-American Development Bank.
    14. Juliana Mesén Vargas, 2018. "Income Effect on Labor Outcomes for People Living in Poverty: the case of PROGRESA," LIDAM Discussion Papers IRES 2018015, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    15. Rodrigo Ceni, 2014. "Social security schemes and labor supply in the formal and informal sectors," Documentos de Trabajo (working papers) 14-12, Instituto de Economía - IECON.
    16. Rodrigo Ceni, 2017. "Pension schemes and labor supply in the formal and informal sector," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-29, December.
    17. Santiago Garganta & Leonardo Gasparini & Mariana Marchionni, 2017. "Cash transfers and female labor force participation: the case of AUH in Argentina," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-22, December.
    18. Awaworyi Churchill, Sefa & Iqbal, Nasir & Nawaz, Saima & Yew, Siew Ling, 2021. "Unconditional cash transfers, child labour and education: theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 437-457.
    19. Manuela A. de Paz-Báñez & María José Asensio-Coto & Celia Sánchez-López & María-Teresa Aceytuno, 2020. "Is There Empirical Evidence on How the Implementation of a Universal Basic Income (UBI) Affects Labour Supply? A Systematic Review," Sustainability, MDPI, vol. 12(22), pages 1-36, November.
    20. Bergolo, Marcelo & Cruces, Guillermo, 2014. "Work and tax evasion incentive effects of social insurance programs," Journal of Public Economics, Elsevier, vol. 117(C), pages 211-228.
    21. Abhijit V. Banerjee & Rema Hanna & Gabriel E. Kreindler & Benjamin A. Olken, 2017. "Debunking the Stereotype of the Lazy Welfare Recipient: Evidence from Cash Transfer Programs," The World Bank Research Observer, World Bank, vol. 32(2), pages 155-184.
    22. Verónica Amarante & Martín Brun, 2018. "Cash Transfers in Latin America: Effects on Poverty and Redistribution," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2018), pages 1-31, November.

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    More about this item

    Keywords

    Social policies; labor markets; Latin America; Caribbean;
    All these keywords.

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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