Bossuroy et al present experimental evidence comparing three “cash plus” variants in Niger: while all models include a core of monthly cash village transfers, savings, coaching and entrepreneurship training, the first variant (“capital”) adds a lump-sum cash grant; a second model (“psychosocial”) includes a life skills training/sensitization on aspirations and social norms; and a third arm (“full”) adds both variants to core components. Results? All three variants have similar impact, like enhancing, among others, consumption and food security 18 months post-intervention, increasing income diversification, and augmenting women off-farm businesses. Yet the psychosocial and full packages display more favorable benefit-cost ratios (1.26 and 0.98, respectively) than the capital’s (.58). Also, quite remarkable that projected into the future (and in line with assumptions made in the literature), those ratios grow between a factor of 7.5 and 21.
One of the most important flagships in social protection is out! After nearly a decade since the first edition, WFP released its State of School Feeding Worldwide. The report provides an amazing tour of practical, analytical and policy issues on, well, the largest safety net program worldwide. Some highlights from the report: 388M children are covered (+36% since 2013); 90% of funding is domestic (28% in low income countries… some lessons for cash transfers here?); 1,668 jobs created every 100k children served (great to capture these multipliers!); and 93% of programs include complementary health and nutrition interventions. That’s all? Nope, have fun with the Excel spreadsheets!
More on in-kind transfers… is cash always king? It depends by the context: where price volatility is rampant due to limited market integration, food transfers can be a more effective response modality (and their value rises automatically with the price of the transferred good). In India, for instance, Gadenne et al find that “… in-kind transfers improve welfare relative to cash for Indian households, an effect driven entirely by poor households”. They also find that expansions of the Public Distribution System not only increase caloric intake by households, but also reduce sensitivity of calories to local prices (check out also their blog here) (h/t Brooks Evans).
Back to cash! What would have happened in the absence of cash transfer Emergency Aid Transfer (EAT) in Brazil? Menezes-Filho et al show that in May 2020, without the EAT poverty would have been 19% instead of 9%; similarly, extreme poverty was about 1-2%, and without cash transfers it would have been 7-8%. And the EAT program reduced the Gini index of per capita household income by 10% from May to September 2020 (h/t Pablo Acosta).
More on LAC, with further nuance provided to an old quandary: how do cash transfers affect labor supply? In Honduras, new evidence by Novella et al shows that intrahousehold bargaining power matters. In fact, women with more power are 4 percentage points less likely to be employed than other women.
Speaking of gender… the impact of Covid-19 has not been gender-neutral: an NBER paper by Albanesi and Kim argues that in the US, “… the adverse impact of the pandemic on employment, unemployment and labor force participation has mostly hit women, particularly mothers”. And what’s a promising way of empowering women? Pay them directly, argues a blog by Bull et al.
Quite a vibrant press coverage on social protection this week! Did The Economist ever had a cover page on safety nets? Now it does for sure, with an intriguing conversation on the safety net of the future, on which changes will endure, and on UBI. In the US, Cass argued that current proposals for child benefits went too far, and wrote a rebuttal to a flurry of less-than-flattering comments. In the meanwhile, Lowrey argues that Stockton’s experiment paid off.
Speaking of UBI, Wendt and MacKay discuss in an interview-style the pros and cons of universal basic income. BTW, Huda et al show that another scheme that didn’t include welfare targeting – a child grant program for indigenous populations of Papua’s province in Indonesia – leveraged the program enrollment phase to increase financial inclusion and civil registration.
What’s new on social insurance? Giles et al shed light on whether poor understanding of social insurance, both the process of enrolling and costs and benefits, drives the relatively low rates of participation in urban health insurance and pension programs among China’s rural-urban migrants: they find that the provision of information has a strong positive effect on participation in health insurance and, among younger age groups, in pension programs. Bonus on social (and contributory) pensions: Tran proposes a Minimum Income in Old Age (MIOA) Index providing a snapshot of pension systems (see here the Excel with data for 113 countries).
Three set of financing resources! Kisanga et al found that in Tanzania, a reduction of VAT from 18 to 17% would result in substantial revenue losses (and negatively impacting poverty), which however could be recouped through personal income tax reforms affecting only the wealthy; Diaz-Sanchez et al have a fascinating – and sobering – paper on Comoros documenting a negative relationship between government’s tax revenue efforts and aid, especially when in the form of large one-off unconditional budgetary support; and in Papua New Guinea, Hoy et al studied the impact of “nudges” (text messages, flyers, and emails) reminding taxpayers of declaration due dates and providing information about the public benefits of paying taxes: apparently the filing of tax declarations soared, but without increasing the amount of tax paid (those who responded to the nudges were largely exempt from paying taxes).
Let’s turn to a juicy compilation of labor and skills (h/t Michael Weber): Karbownik and Wray document that childhood health capital in London affects long-run labor market performance (this happens primarily via lower school attendance and higher rates of disability); Maani and Wen show that in Australia, immigrants from non-English speaking countries experience lower earnings returns and a substantial earnings penalty of up to 25% from educational mismatched employment (i.e., are over-educated); Resnjanskij et al estimate that a mentoring program in Germany can brighten labor market prospects of adolescent students from disadvantaged families by offering them a university-student mentor (math grades, patience/social skills, and labor-market orientation improved by half a standard deviation after one year); and Akay et al find that unemployed people that keep socializing during the unemployment period (art participation, socializing, going on trips, and visiting a church) are more likely to returning to the labor market.
This is a big one: Marinescu et al tackle the issue of labor rights violations in the US and find that a 10% increase in the average wage is associated with a 0.15% decrease in the number of violations per employee and a 4% decrease in fines per dollar of pay. In other words, “… reduced labor market concentration and increased union coverage rate are also associated with reductions in labor violations. Overall, labor violations are regressive: they increase inequality in job quality”.
That’s all for this week, have a great weekend!