How many times do we hear this question: “what makes people “graduate” from a cash transfer program?” A convincing answer comes from Brazil, where Morgandi et al tracked the participation of about 105k Bolsa Familia (BF) households over 2012-2019. They paint a dynamic picture: during the studied period, half of beneficiaries (49%) exited BF permanently, while 39% never left the program. The reminder includes those that left and came back (7%) and others that left a second time and didn’t return (5%). On average, families remain five years (61 months) in the program, with “survival probability” (or the likelihood of still being in BF after each additional month since program entry) being over 80% after three years (and falling to 40% at around the 8th year, see figures above). So who’s more likely to exit? Those better educated, with older children, living in more dynamic urban areas, and holding prior formal work experience (“any type of job” is not associated with quicker exits). And, of course, labor demand at municipal level and enhanced admin cross-checks matter… in 2016 the latter accounted for 36% of exits (see p.32). And check this out: 18% of households held a formal job at entry, and this rose to 30% in the year of their exit… so the objectives of providing income support may coexist with those of labor market (re)entry!
On a more sobering note, Haushofer et al evaluate the effects of a randomly targeted, one-off cash transfer of about $1k to 540 households in rural Kenya. After 3 years, they found that recipients displayed no increases in consumption nor assets, while their children exhibited no higher levels of altruism or prosocial norms comparted to other children (see figure 2/panel A, p.18 for treatment effects across 5 behavioral games). Adults, however, showed a higher level of happiness (see annex figure A1, p.4). What about families living nearby those that got cash? Adults reported worsened mental health, including higher depression and less life satisfaction – the latter being detected also among their children (table 2, p.16). And BTW, children who parents received cash showed a “higher malicious envy” compared to non-recipients (h/t Kathleen Beegle).
Since I mentioned children… Headey and Ruel estimate that, based on data from 44 developing countries, a 5% rise in the real price of food increases the risk of wasting by 9% and severe wasting by 14%. Cash transfers could help mitigating such effects – but as they note, especially if adjusted for inflation.
Let’s get into fragility issues: a new article by Lake et al interrogate the role of “social isolation” in shaping the effects of the Londo program, a short-term public works scheme in the Central African Republic. Such isolation affected participants’ ability to benefit from the program by diverting earned income to unexpected needs (a frequent feature in violent settings) and the labor constrained nature of families. While helpful, the program’s “material support was insufficient to change the social and structural conditions that defined their enduring deprivation” (h/t Paul Bance, Arthur Alik-Lagrange).
Bonus: in a similar vein, a news article by Peterson discusses how the Emergency Social Safety Net program in Lebanon operates within daunting structural challenges in the country (h/t Haneen Sayed).
Climate! Malerba has a review of “environmental fiscal reforms”, or the combination of carbon-pricing mechanisms and spending for environmental goals. The paper shows that there are currently 68 carbon-pricing policies in place globally, but only 5% of those revenues are redistributed as some form of income support. In Switzerland and Canada, they are channeled back via health insurance and tax rebates, respectively; while Austria and Germany are considering other forms of redistribution (see p.14).
From financing to informality: how to tackle the latter in Egypt, Morocco, and Tunisia? Mohammed et al lay out 5 key steps, one of which include “transforming the pension system to provide benefits based on contributions paid only by employees and complemented with a non-contributory universal pension and a poverty-targeted cash transfer program”.
More on pensions: Jarocinska and Ruzik-Sierdzinska argue that Poland’s 1999 reform was inequality-increasing (Gini soaring from 0.19 to 0.27) as a result of moving from a “… more redistributive defined benefit pension system to a system in which benefits are strongly linked to earnings”.
From Europe to Latin America: a study by Fabiani shows that there are 8.9 million paid caregivers in the region, most of whom are women in their early forties with a secondary-level education and limited access to social protection, i.e., only an average of 42% contributes to social security (table 10, p.23). And Plaza and Llano have an edited volume (in Spanish) reviewing how the right to social protection is enshrined in legal systems across the region – see also its launch event on Oct 5 (h/t Ian Orton).
Oh, BTW there is another very intriguing couple of events coming up next week, including one by ILO et al on pandemic prevention and social protection systems (Oct 4-5) and another on supporting people as they move (Oct 5).
Let me conclude by remembering Noemi Pace, the brilliant associate professor and economist. It was heartbreaking to learn of her passing away: Noemi was an outstanding researcher, and her work on cash transfers and social protection will always remain a source of inspiration and knowledge for us all.