Cash transfers and labor supply: New evidence on impacts and mechanisms

Speaker: Dr. Nguyen Viet Cuong (Vietnam National University Hanoi and Mekong Development Research Institute)

Date and time: Tuesday 17 September 2024, 3pm – 4pm (AEST)

Venue: Online Zoom

We study the impact of a national cash transfer program in Vietnam on labor supply using large household surveys and a regression-discontinuity design based on discontinuity in age eligibility. We do not find evidence of a disincentive effect of the cash transfer on labor supply for adults aged 15-64. More importantly, we find robust evidence that the transfer program causes the adults to move from self-employed non-farm work to wage-paying jobs. A likely mechanism is that the transfer program reduces the labor force participation of older people, and they help housework and childcare for younger adults to have wage-paying jobs.

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