Calendrier du 17 avril 2019
Development Economics Seminar
Du 17/04/2019 de 16:30 à 18:00
Salle R2.01 Campus Jourdan 48 Bd Jourdan 75014 Paris
NARITOMI Joanna (London School of Economics)
Welfare Programs and Formal Labor Markets in Middle-Income Countries: Evidence from Conditional Cash Transfer in Brazil
écrit avec François Gerard
Welfare programs, such as conditional cash transfers, have expanded widely in Latin America in the past 15 years, and have been credited for a sizable reduction in poverty rates. Yet, the potential unintended consequences of these programs for labor markets have spurred a heated debate over their future. There is a concern that they lower efficiency by creating disincentives to work, particularly in the formal sector, as many programs condition continued eligibility on reported income levels. However, such disincentive effects at the individual level could be overturned by general equilibrium effects. Welfare programs also inject funds into local economies, potentially raising labor demand, equilibrium wages, and employment, including in the formal sector. This paper links administrative records on the universe of Bolsa Familia recipients and formal workers in Brazil to provide evidence on the partial and general equilibrium effects of the program on formal labor markets. We find evidence of disincentive effects in formal labor supply at the individual level, and positive aggregate effects on local labor markets. These results highlight the importance of accounting for both individual and aggregate effects of welfare programs.