|Dr. Andres Mideros Mora
Essays on the economic effects of non-contributory social protection
Cathal O’Donoghue & Franziska Gassmann
This thesis generates new light on how social transfers promote a sustainable path out of poverty, while fostering economic performance. The main findings of the thesis show that non-contributory social protection investments do foster economic performance. Although traditional labour supply theories argue that a social transfer discourages labour, we find non-negative effects of social transfers on household heads’ labour supply in Ecuador. In the case of investments on human capital, we found that social transfers promoted higher levels of schooling. However, social transfers were more cost-efficient if they were targeted at critical ages, and at the poorest of the poor. Regarding mid-term effects we found a positive treatment effect for social transfers on intragenerational social mobility. Finally, we found a positive rate of return of social protection investments in Cambodia. All these results show that social protection programmes must be seen as an investment rather than as a cost. However, the effects are context-specific. The economic effects of social transfers depend on labour market conditions, access to financial services and productive assets, coverage and quality of health and education services, social exclusion, and general economic performance.