Debunking the stereotype of the lazy welfare recipient: Evidence from cash transfer programs worldwide

Abhijit Banerjee, Rema Hanna, Gabriel Kreindler, & Benjamin A. Olken
2015

Summary

This paper re-analyses the results of seven randomized controlled trials of government run cash transfer programs from six countries – Honduras, Indonesia, Morocco, Mexico (2 different programs), Nicaragua, and the Philippines – to examine the program impacts on labour supply. The re-analysis uses harmonized data definitions and empirical strategies to make the data as comparable as possible. Re-analysing the micro data directly also allows the authors to pool effects across studies to yield tighter bounds than would be possible from any single study.

The paper uses data on this issue from randomized control trials (RCT) that meet three criteria:

  • the trial was an evaluation of a (conditional or unconditional) cash transfer program in a low-income country that compared the program to a pure control group;
  • the micro data for both adult males and females from the evaluation was available;
  • and the randomization needed to have at least 40 clusters.

Across the seven programs, the authors find no observable impacts of the cash transfer programs on either the propensity to work or the overall number of hours worked, for either men or women. Pooling across the five comparably designed studies, in order to maximize statistical power to detect effects if they exist, again finds no observable impacts on either work outcome. Looking at the pooled sample, the authors find a small, significant negative effect on work inside the household (about 1 percentage point, significant at 10 percent level). However, they find no observable effect of the transfers on work outside the household.

Source

Abhijit Banerjee, A., Hanna, R., Kreindler, H. G., & Olken, B. A. (2015). Debunking the stereotype of the lazy welfare recipient: Evidence from cash transfer programs worldwide.