Impact of Social Assistance on Labor Market Mobility : The Case of Turkey
This paper assesses the extent to which social assistance programs in Turkey impact the labor market behavior of those who receive benefits. Theoretically, the possible channels through which the receipt of social assistance may disincentivize work...
| Main Authors: | , , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/08/26718953/impact-social-assistance-labor-market-mobility-case-turkey http://hdl.handle.net/10986/25046 |
| Summary: | This paper assesses the extent to which
social assistance programs in Turkey impact the labor market
behavior of those who receive benefits. Theoretically, the
possible channels through which the receipt of social
assistance may disincentivize work are quite clear, even if
the substantial literature analyzing these dynamics is
somewhat inconclusive. The analysis confirms that even when
controlling for the relevant factors, social assistance
beneficiaries are significantly more likely than
non-beneficiaries to be unemployed or informally employed,
and therefore less likely to be formally employed.
Furthermore, among the unemployed, the probability of moving
into informal employment is found to be significantly larger
for beneficiaries than for non-beneficiaries. The paper
concludes that there are potential disincentive effects at
play in the decision to work, but particularly in whether to
work formally or informally. Finally, an interesting and
perhaps counterintuitive finding is that beneficiaries who
are inactive are less likely to stay inactive in comparison
with non-beneficiaries, which suggests that social
assistance may be playing an activation role rather than
leading to increased dependency. This, coupled with the
previous findings, would indicate that disincentives to
work, based on current design parameters, may not be the
primary concern. Rather, disincentives to formality may be
the prevailing channel through which social assistance
affects labor market outcomes. More attention to designing
programs that are incentive-compatible with formal
employment would be a useful next step for public policy in
this area. |
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