Let me start with a key question on poverty and inequality policy: is it better to “tax less and redistribute less”, or to “tax more and redistributing more”? An elegant cross-country paper by Warwick et al address the question with simulations on Ethiopia, Ghana, Senegal, Sri Lanka, Uzbekistan, and Zambia. Their analysis gauges alternative tax and transfer modalities and finds that instead of keeping ineffective VAT preferential treatments, it’s better to expand VAT and use the revenues for financing a universal basic income (they name it “Universal Transfer”). Bonus: conclusions very similar emerge from a paper by Tiwari et al on Indonesia.
But wouldn’t a UBI generate inflation? According to a new paper by Miller, it hinges on “… whether or not it spurs strong real growth [which in turn depends] on the shape of the benefits and tax scheme”.
What about the effects of cash transfers over time? Two papers tackle the question: Brune et al show that 4 years after the implementation of an integrated cash model in Yemen there are “… positive impacts on savings behavior and asset accumulation, albeit substantially less than the amount the household originally received”. A brief by Fiala et al summarizes the effects of Young Opportunities Program cash transfer scheme. The intervention – which provides $400 to finance vocational training, tools, and start-up costs – increased human capital (340 hours more vocational training), business assets, hours worked, earnings, and consumption: cash transfers “… to move people up the job ladder into skilled and self-employed work can, even after 12-years and shortly after an economic shock, increase resilience against aggregated shocks”.
Since I mentioned labor markets… interesting new analysis by Vergnat explores the relationship between social protection, youth, and poverty in Europe. Among a range of intriguing facts, his analysis shows that social assistance-induced work disincentives are unlikely — out of 20 countries examined, in only two (Slovenia and Malta) benefits from guaranteed minimum income are over half of the minimum wage.
From youth to seniors: cash transfers for the elderly can bolster household labor supply! A paper by Unnikrishnan and Sen shows that in India, having a family member getting social pensions “… increases the probability of working in paid employment by 3.87 percentage points for women aged 20-50”.
From South to East Asia: what are we learning from country-level Covid responses? Gudmalin et al have an excellent review of the Philippines experience: with a massive scale-up conducted in two main tranches (see fig 1 and 2, p.9-10), there is no shortage of lessons on how the country is gradually building confidence on digital solutions – e.g., see box 3/p.8 on the ReliefAgad digital system. Bonus: check out the blog on stress testing social protection by Pesme et al. Double bonus: UNICEF released an overview and a compilation of eight case studies on its precious social protection work during the pandemic (h/t Tomoo Okubo).
On another type of crisis… Moussa et al lay out four key effects of cash transfers to Syrian refugees in Lebanon. Such programs, which were provided over different timeframes (but all with a duration between 10 and 22 months) helped children engage in more formal schooling; reduced child labor; bolstered better health for pre-primary and school-aged kids; and reduced the chance of early marriage among girls aged 15-19 years.
What can be done to address the daily emergency of homelessness affecting a staggering 150 million people globally? In Canada, Dwyer et al present results from a trial giving 50 homeless a one-off, unconditional cash transfer of about $6,000. What happened a year later? Recipients spent less days homeless, used cash wisely, and enabled savings from public coffers in the order of about $615/capita (due to less need to use such services).
But do cash transfers always make a difference? Not necessarily, of course: for instance, in Niger a study by Aker and Jack documents that complementing trainings for agriculture and environmental technology with cash transfers has no additional effect on such tech adoption.
From West to Southern Africa: there is new evidence on cash transfers and food security in Zimbabwe, where Pace et al estimate that the HSCT program increases dietary diversity by 11-16%. This is mostly due to higher liquidity, but up to 1/5 of effects are the result of (mediated by) agricultural activities.
Let’s stay in the region: based on the SCTP scheme in Malawi, a very thoughtful article by Ramponi et al illustrates the different goals and expectations that cash transfers can elicit across sectors; the diverse viewpoints of stakeholders (government, donors, recipients, non-recipients, etc.); and possible misalignments between all of the above! For example, the SCTP is “… estimated to provide benefits in excess of costs from the perspective of national stakeholders. [But in general for some donors] health benefits do not outweigh the opportunity costs”.
From Southern to East Africa! In Kenya, an experiment by Austrian et al examined a package of interventions including four components: community dialogues for gender violence prevention, a conditional cash transfer for education, weekly group meetings for girls with health and life skills training, and training and incentives for financial literacy and savings activities (wealth creation). Participants in two sites participated in a one-intervention only (violence prevention) and then arms adding one component up to all four. Results? In one site, “… conditional cash transfers had small effects on grade attainment but larger impacts on completion of primary school and the transition to secondary school in the most comprehensive arm”, while in the other site CCTs “… increased school enrollment and grade attainment” (h/t Amber Peterman). Bonus: A gender-related viewpoint in The Lancet penned by Blofield et al on Latin America argues that “… [n]ow is a unique time to innovate how social protection can be linked to violence-specific services”.
And from country-specific to a region-wide piece: a fantastic new report by Guven et al examines the role of social protection in the context of high informality, including reviewing key issues around social assistance, insurance and delivery matters.
To conclude… I referred a lot to both Asia and Africa, so how not to mention this brilliant paper: what are the drivers of poverty reduction in those regions? Erumban and de Vries estimate that manufacturing is key in Asia; but in Africa, more manufacturing didn’t come with more productivity (including because of pervasive informality in the sector) – agricultural productivity is instead among the leading African forces for poverty reduction. Bonus on Nigeria with a juicy blog by Lain and Vishwanath calling for expanded social protection in Africa’s most populous country! (h/t Arthur Alik Lagrange).