A fresh look at one of the hardest questions in social protection: how to extend pensions to informal sector workers? A new paper by Guven shows that in Africa, where informality contributes to 55% of the region’s GDP and employs 80% of its labor force, only 10.6% of Africa’s working-age population contributes to pension schemes, ranging from over 60% in the Seychelles to 2% in Ethiopia and Tanzania (coverage is 11.6% of the population for private sector schemes). So how to design pensions for the informal workers? There is no one-fits-all solution, but emerging experiences (e.g., Kenya, Ghana, Uganda, Rwanda, and Benin) show that governments could (i) benefit from modern technology, (ii) lay out communication strategies to raise awareness and build trust on pension schemes, (iii) establish administrative platform, (iv) ensure contributions are invested by professionals, and (v) and pilot-test approaches.
From Africa to ECA: what’s the impact of Greece’s SSI guaranteed minimum income program? A report by Marini et al shows that the SSI, which provides 320,000 households (6.5% of the population) with an average Euro 220/month, displays very high incidence – almost 60% of the beneficiaries belong to the first decile, while 2/3 of the transfers are directed to such bottom 10%. However, coverage is low, with only 37% of people in the poorest decile participating in the scheme, chiefly due to lack or limited awareness of the program. In terms of in-kind schemes in the region, what’s the impact of school feeding in a middle-income country? A new paper on Armenia by Bakhshinyan et al finds small overall impacts, but higher cost-effectiveness than the larger cash transfer family assistance program.
Let’s move to MENA, with three great resources on displacement and technology: interested in an example of a platform where humanitarian, private, and public sectors come together? See the glossy brief on “Kizilaykart”, the multi-wallet e-system supporting both Turkish citizens and refugees connecting safety nets, cash for education, vocational trainings, support to victims of human trafficking, and more sectors. Blockchain is revolutionizing humanitarian assistance – read for instance this piece by Daniels on the King Abdullah Park and Zaatari refugee camps in Jordan, where WFP provided $37 million in cash-based assistance and reduced financial transaction costs by 98%. And how do refugees connect with the world? Check out findings from Jordan, Rwanda and Uganda on how digital solutions help, and barriers in their use.
Speaking of tech… ILO has published a fascinating account of introducing e-INAS MIS in Mozambique, including tracing the first steps in 1999 and discussing various milestones until current e-operationalization. More on the country: what was the impact of the 2015 floods in Mozambique? Salvucci and Santos estimated that consumption dropped by 11–17%, while poverty soared by 6 percentage points. Bonus on climate change: a PNAS article by Diffenbaugh and Burke argues that global warming had a 90% chance to have decreased the pace of inequality reduction.
Jobs materials! Prevailing views on the effects of active labor market policies range from mixed to negative. But a new Harvard review by Yeyati et al takes a more positive stand, with moderate impacts detected across programs (wage subsidies, training, intermediation, etc.)
Marcelin et al assess the effects of the South African Employment Tax Incentive program – a tax credit cutting the costs of hiring young, hard to-employ groups by up to 50%. Over 2011-16, the program helped firms expand investments by 4.8% and profits by 5.7%. (In February 2019, the government extended the program for ten years, until February 2029).
Examining informal workers in Russia, Kim et al argue that, because pensions are partly subsidized by the state, incentives to contribute to social security are limited. Hence, they suggest that “… formalization may not occur simply by changes in labor taxes and transfers but more complex reforms involving reconfiguration of social protection and its financing” (p.26).
Tuning to the US, how to survive on low-wage, unstable, and unpleasant jobs? Coffey et al collected humbling real-world stories from poor workers struggling to make ends meet – but also offering their own thoughtful views on childcare, transport, safety nets.
From poverty lived to poverty measured: Vaz et al adapt the Alkire-Foster Multidimensional Poverty Index on Mexico’s late-PROSPERA and find significant multi-pronged effects of the program. A paper by Klasen and Villalobos investigates the degree of divergence between the standard monetary FGT measure and the AFMP index. Their application to Chile finds a slight divergence, mostly explained by improvements in education, increasing urbanization, and a reduction household size.
A look at subjective wellbeing: can cash buy happiness? After industrial and demographic transitions, Easterlin calls for a third revolution… in happiness! Why is it relevant for my links? Well, he argues that the cradle-to-grave safety net of the welfare state addresses the concerns most important, according to national surveys, for personal happiness over the life course—employment and income security, a fulfilling family life, and good health. The extent of a nation’s success in addressing these concerns is captured in measures of happiness—hence the Happiness Revolution. See also an interview here.
Spatial policy – with first a look at agriculture and then urbanization. On the latter, Bergman et al provided services to reduce barriers to moving to high-upward-mobility neighborhoods in Seattle, including customized search assistance, landlord engagement, and short-term cash transfers. The program increased the share of families who moved to high-upward-mobility areas from 14% in the control group to 54% in the treatment group (here is a summary of the broader initiative’s results in 5 US cities). On agriculture, Gulati et al recommend four reforms for Indian agriculture (emphasis on farmer livelihoods, land and water conservation, protect farmers from shocks, and more competition in agro-markets) (h/t Saksham Khosla). Double-bonus on India: Maxwell lays out his thinking on India’s business activities in Africa, while Chodorow-Reich reflects on the effects of demonetization.
Assorted mix: the world currently spends $21 Trillion (and soon $33 T) on the SGDs according to Kharas and McArthur; TANF, the US cash transfer scheme, has a new Data Collaborative platform with MDRC to connect data sources (here is a webinar); Pichon has an interesting political economy analysis of expanding rural water supply in Ethiopia (wish there was more such work on social protection); the IZA-DFID Program on Gender, Growth and Labor Markets in Low-Income Countries is calling for a new round of thematic research proposals, see for example “Theme 4: The future of work: automation, urbanization and the environment”.
Juicy events coming up! The Asia Pacific Social Protection Week 2019 (Sept 9-12) will be livestreamed here; over the same days, ESID has a three-day event on the politics of development (with plenty of materials on social protection); the following week, Nepal hosts a conference on resilient social protection (Sept 18-19); and on Sept 3, you can join an online course on political economy with Banerjee and Olken!
Let me leave you with a stunning photo reportage from Nairobi’s Kibera informal settlement – so much grace, creativity and art in a place too often know only for poverty and violence.