leonardo gasparini & santiago garganta: social protection and
DESCRIPTION
This presentation is part of the programme of the International Seminar "Social Protection, Entrepreneurship and Labour Market Activation: Evidence for Better Policies", organized by the International Policy Centre for Inclusive Growth (IPC-IG/UNDP) together with Canada’s International Development Research Centre (IDRC) and the Colombian Think Tank Fedesarrollo held on September 10-11 at the Ipea Auditorium in Brasilia.TRANSCRIPT
Social protection, entrepreneurship and labour market activation
Brasilia, september 2014
Social Protection and
Labour Market Impacts in Argentina
Leonardo Gasparini Santiago Garganta
with the support of
Social protection in Argentina
• Broad coverage for formal workers • Increasing but still partial coverage of
informal workers. • Two flagship programs (since late 2000s)
o Moratoria: non-contributory pensions
o Asignación Universal por Hijo (AUH): CCT
Characteristics of AUH
• Monthly cash subsidy per child (around USD 50)
• Conditions • Parents should be unemployed or informal (unregistered) • Children under 18 • Compliance with education and health requirements
AUH is a large program • In terms of participants
o 30% of all children in the country o 90% of children in poorest deciles
• In terms of budget o 0.8 % of GDP
• In terms of the subsidy o Benefit per child represents
15% of mean hh income in poorest three deciles
Large compared to other programs in Argentina (Cruces and Gasparini, 2012) and to other Latin American CCTs (Stampini and Tornarolli, 2012)
Available data is scarce
• Not an RCT • No microdata available from the Program • National household survey (EPH): not a specific
question on AUH but can trace the subsidy with other questions
Large impact on poverty and inequality
0
10
20
30
40
50
60
1 2 3 4 5
Distribution of participants by quintile Reduction in poverty (line= USD 4 PPP)
Reduction in inequality
-13%
-24%
-30% -35%
-30%
-25%
-20%
-15%
-10%
-5%
0%FGT (0) FGT (1) FGT (2)
-2%
-13% -14%
-12%
-10%
-8%
-6%
-4%
-2%
0%Gini Ratio decil 10/1
Larger impact than the average in Latin America (Cruces and Gasparini, 2012).
The debate on unintended outcomes
• Ample support to the program but debate over some unintended outcomes: o Labour informality o Labour force participation
• Our research:
• look for signs of unintended outcomes • using diff-in-diff • exploiting the short panel structure of EPH
Incentives against formalization?
• Universal coverage initiatives may deteriorate the incentives to participate in the formal labor market (Galiani and Weinschelbaum (2012), Levy (2008), Antón et al. (2012))
• The presence of the program could • change decision between self-employment and formal job
• reduce bargaining power of informal workers against their employers
• The practical relevance of the potential disincentives can only be determined with empirical evidence.
Incentives against formalization? Transitions to formality
Informal workers in poor households
Source: Garganta and Gasparini (2014).
0
5
10
15
20
25
30
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
Without children
With children
Before-program
Incentives against formalization Transitions to formality
Informal workers in poor households
Source: Garganta and Gasparini (2014).
0
5
10
15
20
25
30
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
With children
Without children
Before-program After-program
The effect on labour informality
(1) (2) (3)
With_Children * After -0.0765*** -0.0695*** -0.0821***(0.0184) (0.0167) (0.0257)
With_Children (H ) 0.0385*** 0.0472*** 0.0562***(0.0123) (0.0132) (0.0155)
After (Post ) 0.108*** 0.152*** 0.186***(0.0276) (0.0229) (0.0399)
With controls, time and regional dummies No Yes YesExcluding the unemployed No No YesObservations 16,635 16,635 13,777Pseudo R2 0.005 0.086 0.095
Size: estimates represent a mean reduction of around 30% in the probability of formalization for the treatment group
Robust to various checks
Using also
All 1 child 3 children Matching Discontinuity semester 2 2007 2008
(i) (ii) (iii) (iv) (v) (vi) (vii) (viii)
With_Children * After -0.0894** -0.0610** -0.0895** -0.0977*** -0.0534* -0.0612*** -0.00928 0.0259(0.0353) (0.0266) (0.0358) (0.0379) (0.0301) (0.0203) (0.0346) (0.0272)
With_Children (H ) 0.0744*** 0.0323 0.0631*** 0.0488 0.0199 0.0475*** 0.0410* 0.0457**(0.0164) (0.0237) (0.0234) (0.0352) (0.0205) (0.0118) (0.0245) (0.0193)
After (Post ) 0.211*** 0.171*** 0.212*** 0.233*** -0.0127 0.0584** 0.0849** 0.0298(0.0579) (0.0528) (0.0583) (0.0597) (0.0317) (0.0247) (0.0377) (0.0361)
Controls Yes Yes Yes Yes Yes Yes Yes YesObservations 10,057 3,258 7,738 5,571 1,732 22,995 6992 9094Pseudo R2 0.099 0.114 0.102 0.114 0.126 0.087 0.1152 0.1017
Restricted sample: age (25-55) False experiments: intervention in
Effect is decreasing in the age of the child
0-5 6-10 11-14 15-17 Disabled
With_Children * After -0.0876*** -0.0707*** -0.0689** -0.0551* -0.0840**(0.0258) (0.0255) (0.0326) (0.0317) (0.0339)
With_Children (H) 0.0531** 0.0584** 0.0505 0.0318 0.0165(0.0219) (0.0273) (0.0598) (0.0599) (0.0306)
After (Post) 0.185*** 0.181*** 0.155*** 0.212*** 0.179***(0.0416) (0.0399) (0.0368) (0.0456) (0.0386)
Controls yes yes yes yes yesObservations 8,159 4,843 3,661 3,037 2,921Pseudo R2 0.1002 0.1142 0.1008 0.1269 0.1023
Age of youngest child
No effect for secondary workers with formalized primary worker
Primary Secondary Informal primary worker Formal primary worker(i) (ii) (iii) (iv)
With_Children * After -0.100** -0.0609** -0.0472* -0.0902(0.0393) (0.0262) (0.0277) (0.0644)
With_Children (H ) 0.0919*** 0.0174 0.0223 -0.175(0.0191) (0.0216) (0.0203) (0.152)
After (Post ) 0.206*** 0.173*** 0.153*** 0.188*(0.0536) (0.0420) (0.0340) (0.102)
Controls Yes Yes Yes YesObservations 7,494 6,283 5,732 542Pseudo R2 0.091 0.092 0.101 0.186
Type of worker Secondary worker
No evidence for transition to informality
Poorest 30% Poorest 20% Poorest 40%
With_Children * After 0.0692 0.0391 -0.0271(0.0518) (0.0726) (0.0277)
With_Children (H ) -0.0175 -0.0167 -0.0298(0.0268) (0.0562) (0.0298)
After (Post ) -0.0343 0.00902 0.0115(0.0494) (0.0685) (0.0323)
Controls Yes Yes YesObservations 4,883 2,261 8,011Pseudo R2 0.004 0.054 0.031
Labour force participation Is the program discouraging people from participating in the labour market?
o Negative, but small, effect for women o No effect for males
Females MalesTreat * After -0.0168* -0.00285
(0.00878) (0.0121)Treat 0.0307** -0.0207
(0.0125) (0.0134)After -0.00911 -0.0680
(0.0181) (0.0420)
Individual Characteristics Yes YesRegional and time dummies Yes Yes
Concluding remarks
• Need a more open and richer debate on labor
incentives of AUH
o More evidence on existing programs
o Interpretation of evidence
o Discussion on alternative designs
Thanks!