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June 15, 2018 (links edition #61)

Let’s kick off with some new materials on cash transfers and labor markets. In a new JDS piece on the graduation model, Roelen and Devereux find that (i) training and coaching are important complements to cash and material support in achieving positive change, (ii) positive effects extend to the wider community, and (iii) continuous, tailored, and positively engaging modes of messaging are key for achieving change. In another study, Prifti et al examine the effects of the amount of cash on three different labor outcomes in Africa: paid work, own farm work and hired agricultural labor. In Zambia and Kenya, households react to the injection of cash by supplying less labor off-farm and working more instead on their own farm. The labor reallocation pattern seems reversed in Ghana and Lesotho, where households shift time from their own farms to paid work. The drivers of these differences may be related both to the specificities of the local contexts and to program characteristics such as the regularity or lumpiness of the payments or the uncertainty around single disbursements.

More on payment frequency: in Malawi, Brune et al examine the effects of payment in cash or through direct deposit into pre-established accounts at a local bank (h/t Dave Evans). Payments are made immediately, with one day delay, or with eight days delay. Defaulting the payments into savings accounts leads to higher net deposits into bank accounts, an effect that persists for a number of weeks afterwards. However, neither savings defaults nor payment delays affect the amount or composition of spending, suggesting that households manage cash effectively without the use of formal financial products.

Fading impacts of cash transfers? Not on nutrition apparently (h/t Dave Evans). Cahyadi et al find that 6 years after inception, the CCT PKH program continued to have large incentive effects on many of the targeted indicators, such as increasing usage of trained health professionals for childbirth. Among the lasting effects, the CCT halved the share of children age 7-15 who are not enrolled in school, while wage labor for 13-15 year olds was reduced by at least one-third. Bonus on health and nutrition: in a new WD article, Asfaw analyzes village-level rainfall data with a child-level longitudinal survey in Ethiopia. He finds that a standard deviation increase in a village-level precipitation z-score have pronounced effects on stunting and wasting at the lower end of health status distributions and on girls.

A couple of weeks ago I shared a sneak preview of their paper – now the full NBER version is out: Ravallion et al find that economic growth in the US has come with a ‘sinking social floor’. The floor has fallen during the 1990s, and stabilized in the 2000s. The expansion of the food stamps program in the wake of the financial crisis was able to prevent a fall in the floor despite the inequality-increasing growth process. In developing countries, the paper argues that the poorest would do better with a UBI anchored to existing social spending, while for the US the opposite is true (food stamps are raising the floor more than mean spending would imply). Bonus: section 4 of a new AI paper by Furman and Seamans discusses UBI vs wage subsidies vs employment guarantee (with the second being their favorite).

More on social protection-wide analysis. The Malawi Economic Monitor has a very crisp, insightful edition discussion on safety nets with a rich set of nuggets on current performance and future prospects. Prepared by Kandoole et al, the report shows that, although safety nets spending is only 0.6% of GDP (compared to 2% of input subsidies, and almost 6% on humanitarian aid), programs are estimated to cover 25% of the population (relative to the regional average of 10%). It is indeed proposed that financing for future scale-up of safety nets may include transferring funds from input subsidies and humanitarian assistance. See also Box 5 charting future reforms for MASAF public works (in fiduciary management, asset creation, program timing and duration).

An interesting paper on biometric technology in social protection: Sepulveda Carmona argues that there is no common global standard for data protection, stressing the need to adopt legal and institutional frameworks that safeguard privacy and data in social protection systems. She shows that legal and regulatory frameworks often lag behind. Hence she calls for adopting legal and regulatory ‘minimum standards’, which should receive regular reassessments. Boxes 13, 14 and 15 on anecdotes happening in Nigeria, Pakistan and Chile, respectively, are quite intriguing.

Divergent findings on poverty and structural transformation in Africa: Ivanic and Martin show that in poor countries, increases in agricultural productivity generally have a larger poverty-reduction effect than increases in industry or services. However, Dorosh and Thurlow find that the poverty–growth elasticities for trade and transport services and manufacturing, especially agro-processing, are often close to, and sometimes exceed, agriculture’s. Bonus on poverty: Lange et al propose a new method for small area poverty maps when dated census and recent surveys are available (and predictors and structural parameters are subject to drift over time).

Finally, a couple of resources on in-kind assistance: WFP just released its food assistance report, while Ngatia and Evans asked whether free school uniforms help children stay in school – yes they do: school uniforms cut absenteeism by 37% in rural western Kenya.

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