Let’s kick off with a brilliant review on a key issue: Jayachandran summarizes recent literature on small-scale entrepreneurship (“microentrepreneurship”) in low and middle-income countries. She examines the determinants and consequences of joining the formal sector; the impacts of access to financial services and business training; barriers to hiring; and the distinction between self-employment by necessity and self-employment as a calling. Any finding on cash transfers? Of course, here are four examples:
- In Mexico, conditional cash transfers spurred entrepreneurship by 1 percentage point, likely due to the program’s steady income and thus reducing risk aversion;
- In Kenya, one-off cash provisions led to a 33% increase in revenue from self-employment and a 50% increase in business expenditure (but no changes in profits or the likelihood of being a business owner);
- In Uganda, recipients of cash grants displayed higher engagement in non-agricultural employment, higher earnings, worked more hours, adopt formal business practices (record keeping and paying business taxes) and accumulated more capital than the control group.
- In Central America, receiving a large cash grant had a large impact on the likelihood of starting a business.
Speaking of business… can cash transfers increase farm profitability, even when that’s not the program’s main program? Yes they can, but new evidence by Prifti et al from Lesotho shows that impacts are limited to ‘viable’ recipients with land and labor capacity.
Relatedly, almost 1 billion people worldwide have some form of disability: but what’s the state of the evidence on disability interventions in low‐and middle‐income countries? A sobering systematic review by Saran et al examines 166 studies on the matter, 158 of which on health and education, with very little evidence on other dimensions: “… within livelihoods, outcome such as control over own money, poverty and out‐of‐pocket payments, access to social protection programs, and participation in development of inclusive policies were least studied” (p.26).
A rich collection of PDR articles on the welfare an redistributive effects of social assistance was just released! This includes an overview by Nino-Zarazua; social pensions in China by You and Nino-Zarazua, and on the the same topic of non-contributory transfers for the elderly in LAC by Arza; the effects of cash on education and labor markets in Bolivia by Canela and Nino-Zarazua and on schooling and labor market gender differentials in Lesotho by Sebastian et al; the long run effects of cash transfers on human capital in Chile by Neidhofer and Nino-Zarazua; and on conditional cash transfers, gender and jobs in Ecuador by Palacio Ludena.
What’s new on resilience? A brief by Wilkinson et al assesses the Caribbean region’s early actions to manage climate-related disasters. They then lay out a financing proposal whereby (i) national governments would ringfence dedicated contingency funds for early action, which would attract matched funding from donors and be managed by a regional entity; and (ii) donors would increase the capitalization of the regional Emergency Assistance Fund. These modifications, they argue, would make it easier to deploy funds before extreme events happen and based on defined trigger points.
Doubling down the challenge… resilience + fragility! A review by Neaverson et al explores how climate resilience programs can be adapted to fragile and conflict-affected contexts. With case studies from Mali, Myanmar, Niger and South Sudan, they offer insights on how to anticipate operational risks, absorb impacts via ‘do no harm’ approaches, and aligning risk tolerance and project flexibility.
Let’s open the skills and labor box with Indhira Santos and Michael Weber: the ILO flagship report World Employment and Social Outlook 2020 is out. Among the many findings on the quantity and quality of jobs, the report projects a rise in unemployment after a decade of stable levels, while the share of national income going to labor (rather than to other factors of production) declined from 54 to 51% over 2004-2017.
More regionally, a book edited by Mueller and Thurlow lays out a range of issues “beyond stylized facts” on youth and jobs in rural Africa. Featuring case studies from Ethiopia, Ghana, Malawi, Senegal, and Tanzania, the volume shows the importance of nonfarm jobs near urban areas and opportunities across food systems closer to smaller towns.
From one region to the next… Astrov et al show that labor markets in the Central and Eastern Europe improved significantly since 2008-2009. However, the decentralization of wage negotiation mechanisms and coverage by collective bargaining agreements declined, thereby counteracting the positive effects of the generalized reduction in unemployment.
On a similar note, Jäger et al estimate the effects of a mandate in the mid-1990s allocating a third of corporate board seats to workers (shared governance) in Germany. They found that granting formal control rights to workers raises capital formation, hence permitting workers to bargain over investment and institutionalizing repeated interactions between labor and capital.
How should low and middle income countries manage the disruptive impacts of automation? Schlogl and Sumner argue that safety nets and wage subsidies are needed, but a key challenge is how to finance them (without making labor more costly and thus exacerbating a trend toward replacement). Investing in labor-intensive sectors is promising, which also imply major public investments (and do not substitute for a long-run development strategy).
Krskova et al lay out 5 principles (“FIRST”) for improving students’ (in tertiary education) non-cognitive skills – namely focus, intention, responsibility, structure, and time. A set of corresponding strategies for helping students take control of their own learning, work readiness, and achievement is also presented
From learning skills to learning lessons from history: over the past 40 years, the rural population living in poverty decreased by 739.9 million. But what lessons can be drawn? Liu et al explore the question, including challenges in terms of incentives, motivation, participation, and more! (h/t David McKenzie). Bonus: Yang and Walker review the literature on shame and poverty, with a special focus on China’s experience, with an accompanying blog arguing that “… poverty-related shame simply adds to the suffering of people in poverty”.
Since I mentioned history… were the reform of French labor laws and the abolition of slavery in French Equatorial Africa connected? In an interesting historical article, Stanziani documents that over 1890-1914, most political forces in France agreed that the new welfare state should not to be extended to the colonies.
In DC on Tuesday, February 4? Join us and RSVP for an event on universal basic income!