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May 11, 2018 (links edition #56)

The question of whether the effects of cash transfers fade over time is one of hottest in town. A new JDE article by Ham and Michelson provides some interesting nuances to the quandary. Evaluating the Honduras PRAF CCT, they show that demand-side cash incentives alone have limited lasting impacts; but when combined with enhancements on the supply side (clinics and schools), the joint provision results in greater human capital gains and labor market participation.

More on cash transfers, especially in the US: a new experiment with cash transfers will soon take place in four undisclosed American cities (h/t Giuseppe Zampaglione). The ‘Baby’s First Years’ project involves 1,000 low-income mothers: roughly half will be randomly selected to receive an unconditional $333 a month, while the others will form a control group that will receive $20. The unconditional transfer will be loaded onto a pre-paid debit card every month for 40 months. The hypothesis is that this steady stream of payments will make a positive difference in the cognitive and emotional development of children. An NBER paper by Meyer and Wu looks at the performance of an array of US safety nets. Linking survey and admin data they found that, among means-tested transfers, the EITC and SNAP are most effective: all programs except for the EITC sharply reduce deep poverty (below 50% of the poverty line), while the impact of the EITC is more pronounced at 150% of the poverty line. While single parent families benefit more from the EITC, SNAP, and housing assistance, they are still relatively underserved by the safety net, with six programs together reducing their poverty rate by only 38%. Finally, Patel testified before the House of Representatives and identified six ways to strengthen the cash-based TANF program.

Since I mentioned children, Batana and Cockburn estimate poverty rates for African children at $1.90/day. They show that taking into account of demographics results in downward adjustments of child poverty, adult poverty, and child-adult poverty gaps. Also, check out three handy IPC one-pagers providing an overview of social assistance for children in Djibouti, Bahrain, and Algeria.

Turning to health and nutrition, Nguyen et al have a new MCN article on a maternal, neonatal, and child health program in Bangladesh. While the intervention improved women’s micronutrient supplement intake and dietary diversity, path analysis was used to determine which elements most explained intervention impacts. Frontline health workers were highly committed and well supervised. Coverage was high (>90%) for counselling, supplement provision, and weight‐gain monitoring. Improvements were significantly greater for nutrition‐focused variants versus standard modalities. Training quality, delivery coverage and counselling activities were also among the key ingredients of success. A glimpse at food security: Rosamond Naylor, one of the intellectual architects of food security as a concept, reflects on its global state and the elusiveness of attaining it.

There is virtually no week without new research on India’s NREGA public works program! A JDS article by Ajufu and Abiona shows that the program helps mitigate the impact of rainfall shocks. While one standard deviation negative rainfall shock decreases the labor market engagements by 4 percentage points for communities not exposed to NREGA, this effect is counteracted by an estimate of 6 percentage points increase for communities participating in the scheme.

From public works to labor markets, with new stats on informality from ILO. The topline numbers are that 2 billion people – or 61% of the world’s employed population – make their living in the informal economy. In Africa, 85.8% of employment is informal. Such employment is a slightly greater among men (63) than women (58.1%).

On another form of informality – not in labor markets but in social protection provision. In a new working paper, Machado et al assess the role of zakat in the provision of social protection in Sudan, Palestine and Jordan. Although based on the same principles, they show that institutionalization of zakat ranges from obligatory (e.g., Sudan) to voluntary contributions, as well as displaying differentiated benefit provision.

A couple of materials on insurance. Takahashi et al have a working paper examining how the introduction of a formal index insurance product affects informal risk sharing among pastoralists in southern Ethiopia. Using detailed social networks data and randomized incentives to purchase the insurance product, they find respondents’ own formal insurance uptake has no significant effect on their willingness to share risk through customary institutions. In a new blog, Hillier explores the hype for insurance, including in disasters as well as financial inclusion, and laments the limited investments in M&E.

Let’s round it up with a couple of books: Maxwell reviews Dambisa Moyo’s new volume, ‘Edge of Chaos’, with kind of a mixed marks (too neoliberal in his view). Another book, ‘Navigation by Judgment: Why and When Top Down Management of Foreign Aid Doesn’t Work’ by Dan Honig, was discussed (and video recorded) at Harvard – the book compiled a database of evaluations from over 14,000 projects from 9 development agencies between 1973 and 2013.




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