"They're either too lazy or we've made it too easy for them to stay at home," Ben said. With the exception of PAL and Progresafor which the analysis in tables 36 uses the difference-in-difference specificationthe joint significance tests do not reject balance. endobj endobj Our findings on the implicit tax rates in Indonesia and Mexico echo Ravallion and Chen (2013), who measure the tax rate imposed by the Chinese Di Bao cash transfer program. Successful proposals received a one-time unsupervised grants worth $7,500 on averageabout $382 per group member, roughly their average annual income. xUn0Fw?786 JuhT]Wo1EyL}?8L|Fjla:`x5d[c8.QIZ6cfh*KRG3 D:|} Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. endobj 2 0 obj In the last sub-section, we provide sample statistics to provide a descriptive picture of each program area. endstream For women, more uncertainty persists even after aggregating: the point estimates are negative and small, with wide credible intervals that cover both negative and positive values. endobj Plus, believing that most welfare recipients are lazy and underserving, with a select few on the rolls who truly "deserve" the help (despite evidence indicating that the reality is the opposite case), makes it so much easier for middle class Americans to feel good about judging others' choices. On the other hand, cash transfer could increase work through a number of mechanisms. We now turn to evidence from previous studies on the impact of cash transfers on adult labor supply. While there are a range of possible impacts on work (see columns 3 and 4), in all cases the zero effect is comfortably within the distribution of impacts. In the four programs that had the least generous benefits (columns 14), we find no statistically observable impacts on either type of work. No detectable effect on overall probability of work or hours of work, for men or women. endstream xUn0Fw?786M:QnLQ!S}?8L|;#wPtB-VaUD{Eqy_nv15( meRKU.WC/o'|3QN?S)34lymZPl6pU?2#37B The relabeling of welfare recipients as workers even when they do little work echoes the approach of the progressive ideological guru George Lakoff, a professor at the University of California at Berkeley, who advocates reframing the political debate in deceptive ways. 24 0 obj -di Whether its through bullshit drug-testing laws or bullshit work requirement laws, the main culprits, Republicans, have felt thatthe best way to be able to tell people you have gotten people off of theSupplemental Nutrition Assistance Program(SNAP)was not to create a living wage for your citizens, but to just take those assistanceprograms away. The impression many Americans hold is that people are on welfare because they are lazy. Arbortext Advanced Print Publisher 9.0.114/W Debunking the Stereotype of the Lazy Welfare Recipient: Evidence from Cash Transfer Programs Worldwide1 Abhijit Banerjee, MIT Rema Hanna, Harvard Gabriel Kreindler, MIT Benjamin A. Olken, MIT ABSTRACT Targeted transfer programs for poor citizens have become increasingly common in the developing world. endstream Supplemental Nutrition Assistance Program. The pooled estimates further confirm little program impact on work. Abhijit V. Banerjee, Rema Hanna, Gabriel E. Kreindler, Benjamin A. Olken, Debunking the Stereotype of the Lazy Welfare Recipient: Evidence from Cash Transfer Programs, The World Bank Research Observer, Volume 32, Issue 2, August 2017, Pages 155184, https://doi.org/10.1093/wbro/lkx002. 41 0 obj Levy (2006), among others, argued that transfers targeted at informal workers discourage formalization. Panel (A) reports results from the PKH program in Indonesia using SUSENAS 2013 data in all districts where at least 1% of respondents report being PKH beneficiaries (N = 101,568); we coded the transfer size (in 2013) for each household, depending on whether they report receiving PKH, and on the number of children and their ages. Galiani and McEwan (2013) find a small switch to within-household work for men due to the PRAF program. You see, Black Americans make up 32% of welfare recipients, even though they comprise a mere 12% of the US population. These studies generally find that the pure income effect on labor supply is modest (Imbens, Rubin, and Sacerdote 2001; Cesarini etal. endstream Pre-program employment ranged from 48 percent in Mexico Progresa to 63 percent in Morocco, with a weighted mean of 56 percent across all programs. That the rallying cry of " Get a job! <>stream x+ | Skoufias, Unar, and Gonzlez-Cosso (2008) identify a switch from agricultural to non-agricultural work for the PAL program in Mexico. 10 0 obj We document a weak relationship for both programs in figure 4, as households with higher consumption have only marginally lower total expected transfer size. Its just a straight deliverance of funding to people who are working very hard and are earning very little money, so in that sense I think it does a lot of good things, Brown said of the tax credit. Experimental Estimates of the Impact of Cash Transfer Programs on Work Outcomes, by Gender. endstream Indeed, the activation of compassion and anger should mediate effects of these cues on support for welfare (Predictions 10 and 11). Mostly no effect on working probability, except for a 3 percentage point increase for rural men. xUN0Fw?7@r@TRq(Mo\=i&e>7+W4vB-Va e`xx[Ep.e_t~v)]$o t\kRKUmGC/C9>uOB. ;p,}x82/B In this section, we first describe the data and then detail our empirical strategy. Moreover, the literature often paints a picture of the lazy male, who uses transfer stipends to shirk and instead waste money on cigarettes and alcohol, and thus it is important to understand if these stereotypes are borne out in the data. % 38 0 obj In developing countries, Haushofer and Shapiro (2013) study a (non-governmental) large unconditional cash transfer in Kenya and do not detect any impact on total business profit or wage labor as primary income. Indeed, surveys of them consistently show their desire for a job. RWP15-076 December 2015 Download PDF HKS Authors See citation below for complete author information. Yet, a common concern among policy-makers and citizens is that such (Source: U.S. Government Spending) Total costs for SNAP in 2021 were around $113 billion. 2005). Finally, we consider men and woman separately, given the differences in baseline labor force participation. uuid:b8432187-3982-4229-bc47-84a676b48f76 Small increase of hours of work for eligible women of 0.4hours on a base of 42hours per week. Panel A presents the analysis for the binary employment outcome for each individual program, while panel B does so for hours of work per week. Baseline data were not collected for the Philippines PPPP. Display results as threads (2016) carry out a randomized evaluation of a program where women in Northern Ugandamost of whom had never run a business beforewere given a package comprised of $150 in cash, five days of business training, and ongoing supervision. endstream Half our revenue comes from readers like you, meaning we literally couldn't do this work without you. Appendix tables 2 and 3 report the baseline balance check by program, or in the case of the two programs without baseline, the balance on demographic characteristics at endline. " is irrelevant to the majority of those receiving assistance is nothing short of significant for a nation that has, for decades, managed to construct. <>stream But working just ten hours a week for only about half the weeks in the year doesnt make you a typical worker, or show industriousness. In fact, these types of beliefs tend to be associated with less extensive and less generous social assistance programs: figure 1 shows a negative relationship between spending on cash transfers as a fraction of GDP and the share of the population in a country who believe that poverty is due to laziness (as opposed to an unfair society). x+ | Unfortunately, randomized control trials for South Asia or for African countries do not exist, do not include labor supply information, or do not have publically available data. Standard errors clustered at the randomization unit level are reported in round parentheses. Panel (B) reports results from the Progresa program in Mexico, using data from the October 1998 ENCEL survey (which is included in our main results). endobj The Associated Press story, which reads like a press release for the governors proposed budget, never even questions his strange claim about this being hard work. Second, in thinking through large-scale implementation across governments, physical assets (and in-kind transfers, in general) are often more expensive to distribute than cash. xUN0Fw?7@o@Tx`ufA}/T *;^Uklv]'K{"ixNtnI~78_hkkiksf# ?Ar Governments in the developing world are increasingly providing social assistance programs for their poor and disadvantaged citizens. Yang (2008) finds that in the Philippines there is no impact on aggregate household labor supply due to changes in remittances due to exchange rate shocks. endstream However, these means mask considerable heterogeneity in work patterns. For the other five programs, we can take advantage of the fact that baseline data were also collected. Labor supply could also increase if the household combines the lump sum with a loan to purchase a consumer durable that complements the asset, but then needs to work harder to pay down the loan. Standard errors are clustered at the randomization unit level. The overall low effects on work behavior may be, in part, due to the fact that the eligibility to receive (or stay on) one of the programs does not appear to be closely tied to current income levels. To compute these elasticities, we take the estimated treatment effect in columns (2)(4), divide by the mean of the outcome (probability work or hours worked) from column (1), and divide by the average increase in income due to the transfer (13.6 percent). Yet, a common concern among policy makers both in developing as well as developed countries is that such programs tend to discourage work. OP-WBRO170002 155..184 Conversely, with 5 percent probability a new program will tend to increase work status by at least 1.4 percentage points. He points to United Way data showing that in every state, there are more people in the ALICE categoryAsset-Limited, Income-Constrained, Employedworking but not able to afford basic necessities with their paychecks. He just wants to take handouts 21 0 obj The total transfer is the net present value of transfers over six years, assuming a discount factor =0.9. <>stream Bayesian posteriors are computed using the rstan package, 20,000 iterations on four chains, thinning the result by a factor of two. 19 0 obj On the other hand, these programs could have positive effects on work if they help relieve the credit constraints of the poor to allow them to invest in small enterprises or if they have spillover effects. Table 6 reports the results for work outcomes from pooling the results for the seven programs using the Bayesian hierarchical model described above. Details of this procedure can be found in Online Appendix 1. In this paper, we re-analyze the results of seven randomized controlled trials of government-run non-contributory cash transfer programs from six countries worldwide to examine their impacts on labor supply.3 Re-analyzing the data allows us to make comparisons that are as similar as possible, using harmonized data definitions and empirical strategies. By doing this, they hope to brand critics of welfare as anti-worker., Fifty-six percent of welfare recipients are in working families, according to a misleading recent report by the University of California at Berkeleys left-wing Center for Labor Research and Education. The papers are classified in two broad groups: (1) those dealing with the ethical aspects of the theory of social choice and (2) those concerned with the positive aspects.The papers in the first part are concerned with the Arrow-type aggregation problem or aspects of it and with more specific . When welfare leavers work, they generally work full-time. But the report reached that false conclusion by defining even very lazy people as workers: We define working families as those that have at least one family member who works 27 or more weeks per year and 10 or more hours per week.. As the Los Angeles Daily News points out: In 2013, Californias public-employee pension systemsincluding those for police, firefighters and teacherswere carrying an estimated aggregate of $198 billion in unfunded liability. Taken to its extreme (and it often is), this line of argument suggests that welfare recipients are cashing in on an easy ticket to a comfortable life in which they opt out of work and instead. The sample is all adults between 16 and 65years old, excluding domestic workers. x+ | For all of the programs in our study, regions were first geographically targeted based on some form of aggregate poverty data. <>stream We include both these activities in the employment status, and we later analyze two outcome variables that differentiate between household work (any self-employed activity) and work outside the household (casual or permanent employment). Also, drug testing would send a message to society that abusing the system . Kai Pfaffenbach / Reuters March 8, 2018 "Welfare makes people lazy." The notion is buried so deep within mainstream political thought that it can often be stated without evidence. endobj State legislative leaders have sought to expand Medicaid and other government healthcare programs to cover illegal immigrants at a cost of at least $1.3 billion annually, which Brown has not yet fully endorsed, although his budget does earmark the more modest sum of $62 million to begin enrolling low-income immigrants in Medi-Cal, Californias version of Medicaid, on the assumption that President Barack Obama will prevail in a court battle over his executive order.. In 2022, $1.3 trillion is projected to be spent on welfare programs in the United States (Source: U.S. Government Spending) In 2022, an estimated $165 billion will be spent on nutrition assistance, including $115 billion on SNAP. xUn0Fw?786 JuhT]Wo1EyL}?8L|FPc X T'S)a|t6Lr3[FK-UYtU^> >%Nv'U2{#3B Due to the low mean of these work outcome variables in the control group for women, the implied elasticities are moderately negative, between 0.2 and 0.36. Specifically, if people believe that higher earnings will disqualify them from receiving benefits, they will have a disincentive to work. Can you donate $3 right now to help Daily Kos keep fighting? Military service members on active duty spent $24 million in food stamps at military commissary shops from September 2014 to August 2015, and 45 percent of students in schools run by the military . No detectable effect on overall probability of work. New advances in technologies for distributing cash, such as mobile money, may make it easier to provide cash directly to beneficiaries with both potentially low leakage and low costs. The evaluations are listed in order from the least generous in terms of benefits relative to consumption levels (Honduras PRAF) to the most generous (Nicaraguas RPS and Mexicos Progresa). Therefore, we included seven RCTs in this analysis: Honduras Programa de Asignacin Familiar II (PRAF II), Moroccos Tayssir, Mexicos Progresa and Programa de Apoyo Alimentario (PAL), Philippines Pantawid Pamilyang Pilipino Program (PPPP), Indonesias Program Keluarga Harapan (PKH), and Nicaraguas Red de Proteccin Social (RPS). In particular, households may choose not to work outside the household due to fears that this form of employment could disqualify them from receiving benefits, regardless of whether this fear is rational or irrational according to program rules. 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