The anatomy of behavioral responses to social assistance when informal employment is high

Autores
Bergolo Sosa, Marcelo Luis; Cruces, Guillermo Antonio
Año de publicación
2016
Idioma
inglés
Tipo de recurso
artículo
Estado
versión publicada
Descripción
The disincentive effects of social assistance programs on registered employment are a first order policy concern in developing countries. Means tests determine eligibility with respect to some income threshold, and governments can only verify earnings from registered employment. The loss of benefit at some level of formal earnings is an implicit tax that results in a strong disincentive for formal employment. We study an income-tested program in Uruguay and extend previous literature by developing an anatomy of the behavioral responses to this program. Our identification strategy is based on a sharp discontinuity in the program?s eligibility rule and uses information from the program?s records, social security administration data, and a follow-up survey. First, we establish that beneficiaries respond to the program?s incentives by reducing their levels of registered employment by about 8 percentage points. Second, we find the program induces a larger reduction of formal employment for individuals with a medium probability to be a registered employee, suggesting some form of segmentation ? those with a low propensity to work formally do not respond to the financial incentives of the program. Third, we find evidence that the fall in registered employment is due to a larger extent to an increase in unregistered employment, and to a lesser extent to a shift towards non employment. Fourth, we find an elasticity of participation in registered employment of about 1.7, implying a deadweight loss from the behavioral responses to the program of about 3.2% of total registered labor income.
Fil: Bergolo Sosa, Marcelo Luis. Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Ciencias Económicas. Centro de Estudios Distributivos Laborales y Sociales; Argentina
Fil: Cruces, Guillermo Antonio. Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Ciencias Económicas. Centro de Estudios Distributivos Laborales y Sociales; Argentina
Materia
welfare policy
labor supply
registered employment
labor informality
Nivel de accesibilidad
acceso abierto
Condiciones de uso
https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
Repositorio
CONICET Digital (CONICET)
Institución
Consejo Nacional de Investigaciones Científicas y Técnicas
OAI Identificador
oai:ri.conicet.gov.ar:11336/101379
Acceder
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network_name_str CONICET Digital (CONICET)
spelling The anatomy of behavioral responses to social assistance when informal employment is highBergolo Sosa, Marcelo LuisCruces, Guillermo Antoniowelfare policylabor supplyregistered employmentlabor informalityhttps://purl.org/becyt/ford/5.2https://purl.org/becyt/ford/5The disincentive effects of social assistance programs on registered employment are a first order policy concern in developing countries. Means tests determine eligibility with respect to some income threshold, and governments can only verify earnings from registered employment. The loss of benefit at some level of formal earnings is an implicit tax that results in a strong disincentive for formal employment. We study an income-tested program in Uruguay and extend previous literature by developing an anatomy of the behavioral responses to this program. Our identification strategy is based on a sharp discontinuity in the program?s eligibility rule and uses information from the program?s records, social security administration data, and a follow-up survey. First, we establish that beneficiaries respond to the program?s incentives by reducing their levels of registered employment by about 8 percentage points. Second, we find the program induces a larger reduction of formal employment for individuals with a medium probability to be a registered employee, suggesting some form of segmentation ? those with a low propensity to work formally do not respond to the financial incentives of the program. Third, we find evidence that the fall in registered employment is due to a larger extent to an increase in unregistered employment, and to a lesser extent to a shift towards non employment. Fourth, we find an elasticity of participation in registered employment of about 1.7, implying a deadweight loss from the behavioral responses to the program of about 3.2% of total registered labor income.Fil: Bergolo Sosa, Marcelo Luis. Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Ciencias Económicas. Centro de Estudios Distributivos Laborales y Sociales; ArgentinaFil: Cruces, Guillermo Antonio. Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Ciencias Económicas. Centro de Estudios Distributivos Laborales y Sociales; ArgentinaIZA - Institute of Labor Economics2016-09info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionhttp://purl.org/coar/resource_type/c_6501info:ar-repo/semantics/articuloapplication/pdfapplication/pdfapplication/pdfhttp://hdl.handle.net/11336/101379Bergolo Sosa, Marcelo Luis; Cruces, Guillermo Antonio; The anatomy of behavioral responses to social assistance when informal employment is high; IZA - Institute of Labor Economics; IZA Working Papers; 10197; 9-2016; 1-862365-9793CONICET DigitalCONICETenginfo:eu-repo/semantics/altIdentifier/url/https://www.iza.org/publications/dp/10197/the-anatomy-of-behavioral-responses-to-social-assistance-when-informal-employment-is-highinfo:eu-repo/semantics/openAccesshttps://creativecommons.org/licenses/by-nc-sa/2.5/ar/reponame:CONICET Digital (CONICET)instname:Consejo Nacional de Investigaciones Científicas y Técnicas2025-10-22T11:24:04Zoai:ri.conicet.gov.ar:11336/101379instacron:CONICETInstitucionalhttp://ri.conicet.gov.ar/Organismo científico-tecnológicoNo correspondehttp://ri.conicet.gov.ar/oai/requestdasensio@conicet.gov.ar; lcarlino@conicet.gov.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:34982025-10-22 11:24:04.393CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicasfalse
dc.title.none.fl_str_mv The anatomy of behavioral responses to social assistance when informal employment is high
title The anatomy of behavioral responses to social assistance when informal employment is high
spellingShingle The anatomy of behavioral responses to social assistance when informal employment is high
Bergolo Sosa, Marcelo Luis
welfare policy
labor supply
registered employment
labor informality
title_short The anatomy of behavioral responses to social assistance when informal employment is high
title_full The anatomy of behavioral responses to social assistance when informal employment is high
title_fullStr The anatomy of behavioral responses to social assistance when informal employment is high
title_full_unstemmed The anatomy of behavioral responses to social assistance when informal employment is high
title_sort The anatomy of behavioral responses to social assistance when informal employment is high
dc.creator.none.fl_str_mv Bergolo Sosa, Marcelo Luis
Cruces, Guillermo Antonio
author Bergolo Sosa, Marcelo Luis
author_facet Bergolo Sosa, Marcelo Luis
Cruces, Guillermo Antonio
author_role author
author2 Cruces, Guillermo Antonio
author2_role author
dc.subject.none.fl_str_mv welfare policy
labor supply
registered employment
labor informality
topic welfare policy
labor supply
registered employment
labor informality
purl_subject.fl_str_mv https://purl.org/becyt/ford/5.2
https://purl.org/becyt/ford/5
dc.description.none.fl_txt_mv The disincentive effects of social assistance programs on registered employment are a first order policy concern in developing countries. Means tests determine eligibility with respect to some income threshold, and governments can only verify earnings from registered employment. The loss of benefit at some level of formal earnings is an implicit tax that results in a strong disincentive for formal employment. We study an income-tested program in Uruguay and extend previous literature by developing an anatomy of the behavioral responses to this program. Our identification strategy is based on a sharp discontinuity in the program?s eligibility rule and uses information from the program?s records, social security administration data, and a follow-up survey. First, we establish that beneficiaries respond to the program?s incentives by reducing their levels of registered employment by about 8 percentage points. Second, we find the program induces a larger reduction of formal employment for individuals with a medium probability to be a registered employee, suggesting some form of segmentation ? those with a low propensity to work formally do not respond to the financial incentives of the program. Third, we find evidence that the fall in registered employment is due to a larger extent to an increase in unregistered employment, and to a lesser extent to a shift towards non employment. Fourth, we find an elasticity of participation in registered employment of about 1.7, implying a deadweight loss from the behavioral responses to the program of about 3.2% of total registered labor income.
Fil: Bergolo Sosa, Marcelo Luis. Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Ciencias Económicas. Centro de Estudios Distributivos Laborales y Sociales; Argentina
Fil: Cruces, Guillermo Antonio. Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Ciencias Económicas. Centro de Estudios Distributivos Laborales y Sociales; Argentina
description The disincentive effects of social assistance programs on registered employment are a first order policy concern in developing countries. Means tests determine eligibility with respect to some income threshold, and governments can only verify earnings from registered employment. The loss of benefit at some level of formal earnings is an implicit tax that results in a strong disincentive for formal employment. We study an income-tested program in Uruguay and extend previous literature by developing an anatomy of the behavioral responses to this program. Our identification strategy is based on a sharp discontinuity in the program?s eligibility rule and uses information from the program?s records, social security administration data, and a follow-up survey. First, we establish that beneficiaries respond to the program?s incentives by reducing their levels of registered employment by about 8 percentage points. Second, we find the program induces a larger reduction of formal employment for individuals with a medium probability to be a registered employee, suggesting some form of segmentation ? those with a low propensity to work formally do not respond to the financial incentives of the program. Third, we find evidence that the fall in registered employment is due to a larger extent to an increase in unregistered employment, and to a lesser extent to a shift towards non employment. Fourth, we find an elasticity of participation in registered employment of about 1.7, implying a deadweight loss from the behavioral responses to the program of about 3.2% of total registered labor income.
publishDate 2016
dc.date.none.fl_str_mv 2016-09
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
http://purl.org/coar/resource_type/c_6501
info:ar-repo/semantics/articulo
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/11336/101379
Bergolo Sosa, Marcelo Luis; Cruces, Guillermo Antonio; The anatomy of behavioral responses to social assistance when informal employment is high; IZA - Institute of Labor Economics; IZA Working Papers; 10197; 9-2016; 1-86
2365-9793
CONICET Digital
CONICET
url http://hdl.handle.net/11336/101379
identifier_str_mv Bergolo Sosa, Marcelo Luis; Cruces, Guillermo Antonio; The anatomy of behavioral responses to social assistance when informal employment is high; IZA - Institute of Labor Economics; IZA Working Papers; 10197; 9-2016; 1-86
2365-9793
CONICET Digital
CONICET
dc.language.none.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv info:eu-repo/semantics/altIdentifier/url/https://www.iza.org/publications/dp/10197/the-anatomy-of-behavioral-responses-to-social-assistance-when-informal-employment-is-high
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
eu_rights_str_mv openAccess
rights_invalid_str_mv https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
dc.format.none.fl_str_mv application/pdf
application/pdf
application/pdf
dc.publisher.none.fl_str_mv IZA - Institute of Labor Economics
publisher.none.fl_str_mv IZA - Institute of Labor Economics
dc.source.none.fl_str_mv reponame:CONICET Digital (CONICET)
instname:Consejo Nacional de Investigaciones Científicas y Técnicas
reponame_str CONICET Digital (CONICET)
collection CONICET Digital (CONICET)
instname_str Consejo Nacional de Investigaciones Científicas y Técnicas
repository.name.fl_str_mv CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicas
repository.mail.fl_str_mv dasensio@conicet.gov.ar; lcarlino@conicet.gov.ar
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score 12.982451

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