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12:30 - 13:45 24 June 2015

Means-tested Social Assistance and Labor Market Informality

Location

IFS Basement | Institute for Fiscal Studies (link Map)
7 Ridgmount Street | London | WC1E 7AE | United Kingdom

Open to: Academic | Student
Ticketing: Open

Speaker information

Marco Manacorda

In this paper we study the effect of a generous income-tested anti-poverty program in Uruguay on recipients' labor supply. When labor market informality is widespread, as in many low and middle-income countries, individuals can gain eligibility for social assistance by shifting from formal to informal employment. Using matched restricted-use social security and administrative program micro-data on the universe of applicants plus sample survey data on self reported employment status, and exploiting the discontinuous assignment to the program as a function of a baseline poverty score, we show that the program significantly reduced participation in the formal labor market and that this was largely compensated by a rise in informality. We find no overall effect on participation. We conclude by discussing the welfare implications of social assistance when informality is widespread.


Contact

Institute for Fiscal Studies
020 7291 4800 | -


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