The impacts of social protection benefits on behaviours potentially related to inclusive growth: a literature review (One Pager)

Social protection benefits could theoretically lead to a distortion in marginal incentives given by market prices and, therefore, could have negative impacts on microeconomic behaviours potentially related to economic growth, such as saving and labour supply. On the other hand, they could allow liquidity- and credit-constrained individuals and households to invest in education, in a new business or even in migrating to places where they could make better use of their skills. Paiva and Varella (2019) surveyed the empirical literature about the effects of contributory and non-contributory social protection benefits on a set of microeconomic behaviours that are potentially related to economic growth: (i) consumption and saving; (ii) labour supply; (iii) education; (iv) fertility; (v) migration; and (vi) innovation and risk-taking.