London: ESRC GPID Research Network (Working Paper 16)
The paper reconsiders the growing literature on income transfers and labour market outcomes in low and middle income countries. Following the canonical literature in high income countries, to date most studies on low and middle income countries have focused on testing for potentially adverse labour supply incentive effects from transfers. In the process they have neglected the potential impacts of transfers on structural transformation. The hypothesis at the core of this paper is that productivist social assistance, understood as income transfers capable of improving productive capacity among disadvantage groups, is a key policy helping to manage adverse trade offs between structural transformation and inclusive growth. The paper reconsiders the empirical literature in this light and sketches a research agenda reassessing the role of social assistance in 21st c. development models.