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Citation Information

Type Journal Article
Title Does a Cash Transfer Affect Elderly Labour Supply? Evidence from Age Discontinuities in Bolivia
Publication (Day/Month/Year) 2013
URL http://www.iza.org/conference_files/worldb2013/borrella mas_m9045.pdf
We study the effect of a cash transfer to elderly individuals on their labour supply decisions by using data on households in Bolivia. We identify the effect thanks to a regression discontinuity design since a policy reform makes the eligibility for the transfer discontinuous at age 60. We find that the transfer decreases the probability of being em- ployed by 5-10 percentage points although it is not statistically significant. In addition, the transfer decreases employment by 20-44 percentage points for females in urban areas and it is highly significant while it is not for the remaining subgroups of individuals by gender and residence in an urban area. The empirical evidence informs policy decisions about the labour market for elderly individuals by suggesting i) that the cash transfer program that the Bolivian government setup only marginally affects labour supply on average and ii) that policy design should account for heterogeneous responses by differ- ent subgroups of individuals.

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