Let’s start with the future: Michal Rutkowski discusses the future of social protection, offering insights on the changing nature of work, informality, ‘progressive universalism’, balanced labor regulations, and how to extend support to the many uncovered worldwide.
More on the growing debate around universality: a new NBER paper by Hanna and Olken simulates the effects of a Universal Basic Income in Indonesia and Peru (h/t Will Wiseman). In Indonesia, UBI was compared to the Bantuan Langsung Tunai (BLT) program, an unconditional cash transfer scheme; in Peru, the comparison was with the national conditional cash transfer program, Juntos. Their analysis shows that existing targeted schemes appear to deliver substantial improvements in welfare compared to universal programs. This is because they can transfer much more on a per-beneficiary basis to the poor as compared with UBI. The primary downside is horizontal equity – because targeting is imperfect, there will be a substantial number of poor households who slip through cracks and are excluded. Nevertheless, the simulations suggest the welfare gains from targeting may be substantial.
In a similar vein, a WIDER working paper by Maboshe and Woolard found that in South Africa, direct taxes and targeted cash transfers are progressive (h/t Dave Evans). Specifically, their CEQ-based analysis reveals that the direct tax burden is almost entirely borne by the top three deciles; that nearly half of the entire cash transfer budget goes to the three poorest deciles; and that the net result is a decline in inequality (-0.06 Gini points) and poverty (-2/3 measured at US$1.25/day).
But what can social protection learn from the experience of universal health coverage? My short blog distills five lessons: universalism doesn’t necessarily make the poorest better-off; targeting and universalism can co-exist; most countries start with carefully targeted programs; these are subsequently expanded widely; and a range of trade-offs between sustainability, coverage and adequacy emerge in the process. By the way, last week I shared the media reaction to the cancellation of Ontario’s UBI pilot: now there is also a class action against that decision.
From health to other dimensions of human capital: Campisi et al have an Innocenti paper reviewing the literature on nutrition and catch-up growth during adolescence. A CID working paper by Nedelkoska et al examines the interactions between human capital and automation, including distinguishing between tasks performed on the job, the tools and technologies employed when performing those tasks, and the knowledge, skills and abilities that enable using the tools and perform the tasks.
Let’s look at fragility issues. A pyrotechnic podcast with Owen Barder where he argues that cash transfers would represent a welcome move to end refugee camps: “… we spend an enormous amount of resources on supporting refugees in refugee camps. And one interesting question is whether if we used that resource to reduce the friction of absorbing refugees into our societies in other ways, whether we could reduce the political opposition to having refugees” (h/t Paul Niehaus). More on displacement: IZA takes stock of its recent prolific work in the impact of refugees on crime and terrorism (here), socioeconomic outcomes (here), language and educational attainment (here), long-run prosperity (here), and housing and segregation (here). Simon Maxwell has a thoughtful piece on rethinking the concept of ‘fragile states’: he argues the term has been overly loaded, casting doubts over the predictive ability of statistical models describing it. Instead, he favours expert panels and participatory approaches tailored to the needs of different actors. Bonus on aid effectiveness: an illustrious panel of 15 economists points out that the ‘aid system is broken’ and we need to look at the causes of such dysfunction. It’s an interesting piece, but surprisingly with no views from aid-receiving countries and households.
On a related matter… how does resilience change over time? An 80-page ODI paper Jones et al tracks how households in eastern Myanmar managed a series of floods using a mobile phone panel survey of 1,200 individuals. They show that the levels of resilience change considerably over time; that disasters can have both direct and indirect effects on the affected population; and that while various socioeconomic groups may start off with very different levels of overall resilience, the impacts of disasters are somewhat even. In their words, “… although poor and marginalised groups may be disproportionately at risk to start with, this risk is not further magnified after a disaster takes hold”.
Since I mentioned mobile phones, let me highlight some other tech-related materials: a Brookings short piece (and full paper) by Ravi asks whether India is really ready for the JAM trinity (i.e., Jan Dhan bank accounts, Aadhaar unique identity numbers, and mobile phones). To do so, she developed “JAM preparedness indexes” using household-level data covering those three dimensions. The results show a remarkably high level of JAM preparedness within a relatively short period of time (although with remarkable variations across states). In Malawi, Beaman et al have an EGC paper testing whether the provision of farming technologies is more effective if targeted via social network data or less data-intensive approaches, and if the diffusion of such technologies follows a learning process. Their experiment shows, for instance, that diffusion follows a ‘complex contagion’ pattern and that “with only about 10 interviews per village, it may be possible to identify individuals who can trigger the diffusion process”. Bull has a two-part CGAP blog (here and here) arguing that the Findex data shows greater progress on financial inclusion than a report by Rhyne and Kelly claimed (h/t Jonathan Morduch).
Some interesting resources of broad developmental quandaries. An article by Bach and Nallet examines the ‘middle-class’ in Ethiopia. They argue that the notion is conceived fluidly by different actors, hence generating varying interpretations and expectations – in other words, the concept of ‘middle-class’ isn’t consistent analytically, but serves a powerful political function. Moving to Asia, Montes traces the development trajectory of 6 South-East Asian countries. Among the many findings, the paper argues that “… contrary to Myrdal’s expectations, elites in the region, even those without a socialist mindset, have been relatively successful in nation-building efforts, including through evolving, though socially costly, industrial development interventions”.
Final treat: registration for Harvard’s Problem Driven Iterative Adaptation (PDIA) approach free online training is open.