Social welfare benefits and their impacts on labour market participation among men and women in Mongolia

Aside from providing income support to individuals in dire situations, social welfare benefits may unintentionally influence labour decisions, such as whether or not to take up a job, how many hours to work and which type of work to opt for. This paper investigates the relationship between social welfare benefits and labour market outcomes, measured by labour market participation and work intensity for women and men in Mongolia. Mongolia has an extensive system of social welfare benefits, which are mainly allocated based on categorical criteria, and the country suffers from relatively low labour market participation. The empirical analysis uses data from the 2012 Mongolian Household Socio-economic Survey and applies standard regression analysis and quasi-experimental methods. The paper pays particular attention to women since - in spite of the fact that their level of education is similar to that of men - their labour market participation is considerably lower compared to men. The results of the analysis indicate that social welfare receipt does not affect the labour market participation of men, but it has a negative impact on women. In terms of hours worked, men in beneficiary households tend to work more hours, while women work fewer hours if they are social welfare recipients.

Keywords: social welfare benefits, labour market participation, Mongolia

JEL Classification: I38, J22