The delivery of social assistance is taking centerstage more than ever! So let me kick off with a rich compilation of materials: the must-read case studies on cash transfers identification and payments from the WBG G2Px initiative are now available for Pakistan, Brazil, Ecuador, Peru, Colombia, Jordan, and South Africa. These are part of a larger summary report by such initiative examining a range of practices on payments and scalability issues more widely.
Keeping the focus on delivery, Millar and Whiteford have a brilliant article on the timing of safety nets in the UK and Australia, including how to deal with problems of overpayment and debt – e.g., see issues around “robodebts” in Australia (PPT also available here). In India, Rajan discusses the challenges and future of benefit registration for self-employed workers; a 2-pager by Itcovitz defines the Togo Novissi solidarity fund and cash transfer as “exemplary”; and a global GIZ piece by Barca and Hebbar – somewhat in between a paper and a PPT – provides a nice exploration of dynamic inclusion and data updating in safety nets.
Moving to a specific country, the US, research on the effects of the various Covid cash transfers and insurance-based programs is now starting to form a consistent evidence base. In terms of cash transfers, for example, Coibion et al show that 40% of transfers was or would be spent – which is in line with my reading of international evidence of 30-55% being spent during crises; in fact, transfers were largely saved and used for debt repayment; also, cash helped 20% of unemployed to search harder for jobs.
The point on “searching for jobs” gets us quickly to the debate on unemployment insurance (UI): does it disincentivize labor supply? Marinescu et al show that ‘despite’ the $600/week unemployment benefits – which had replacement rates (benefit/wage) above 100% for many workers – applications-per-vacancy were higher during the COVID-19 crisis than before. This is because job vacancies decreased by 64% during the crisis, while job applications only decreased by 21% (the pattern holds even for lower wage occupations). In a different paper, Boar and Mongey offer 4 reasons for the lack of disincentives: (i) the temporary nature of the CARES Act, (ii) uncertainty that their return-to-work offer might expire, (iii) search frictions, and (iv) wage losses out of unemployment in a recession. And if all this was not enough… Farooq et al find that longer UI benefit durations improve matching between workers’ educational attainments and the educational requirements of jobs, especially among liquidity constrained workers.
Speaking of practice, ILO and ESCAP have a crisp report examining ongoing social protection responses in Asia and Pacific countries and future directions. A lot of juicy operational achievements, which as we have also documented are in many ways “significant and unprecedented” (p.13). Among the challenges (section 4), I particularly liked the discussion on “attempts to reach new caseloads have been far more complex and slower than anticipated”. It’s quite humbling to note that even in Hong-Kong, the universal cash transfer program “… announced in February was only expected to start making payments in July due to delays in establishing registration systems”.
More on Asia! Jean Dreze worries India’s Covid response (“… with tax revenue a fraction of normal levels, state governments are finding it difficult to provide more than symbolic relief”); an ET piece discusses the country’s National Programme of Mid-Day Meal in Schools; the Indian Assam state plans to have a program of Rs1,000/month per household, and under which “a male member is not entitled to get the money [and] have to nominate a female member of the family whosoever she may be”; and there are plans in Bangladesh to have a ‘cash plus’ intervention for children in exploitative work in two slum areas of Dhaka.
Moving to a different region, Richardson et al have an excellent report on social protection in Southern and Eastern Europe and Central Asia. Among other aspects, they examine fiscal stimuli packages (table 5, p.51-53) and capture the direct and indirect impacts of public responses to crises (table 2, p.17).
What about LAC? Lustig et al have a new paper estimating the distributional consequences of covid-19-induced lockdown policies in Argentina, Brazil, Colombia and Mexico (their results on poverty are worse than other projections). Interestingly, they find that the worst effects are not on the poorest, but those (roughly) in the middle of the distribution. They also look at the effects of expanded social assistance: this has a large offsetting effect in Brazil and Argentina, much less in Colombia. In Mexico, there has been no such expansion.
Resuming the thread started with universality in Hong-Kong, there are several new resources on universal basic income. Banerjee et al examine the effects of UBI in Kenya during the pandemic: the Covid crisis, compounded with seasonal effects, wiped out income gains from new non-agricultural enterprises that cash transfers helped set up; but people were also more protected from food insecurity (h/t Paul Niehaus). Hasdell has a handy “review of reviews” of the evidence on UBI. An IZA piece by Colombino busts 4 assumptions in UBI. An interesting paper on efficient redistribution by Boar and Midrigan shows that high, broad based taxes and lump sum transfers (UBI) seem optimal to reduce inequality. For Kidd and Sibun UBI “… all of a sudden begin to make more sense”. Germany will pilot a privately-funded UBI of $1,4000/month for 3 years to 120 people. And while not a UBI, the basic income program in Marica, which also uses a separate Mumbuca currency for the scheme, is now underpinned by an impressive research framework. Bonus: Hayek endorsed a guaranteed minimum income—but didn’t say why, so Zwolinski tries to reconstruct Hayek’s argument.
Moving to insurance, ILO’s Bertranou and Montt reflect on Chile’s proposal to withdraw up to 10% of total individual pension fund savings, which they consider responsive to the COVID-19 crisis and attuned with the wider discussion of the future of the pension system in the country. But they also note that the withdrawal could increase the fiscal burden on social pensions.
… and from insurance to firms: in the US, Bartik et al argue that the first round of the Paycheck Protection Program improved firm survival, but speed may have resulted in suboptimal targeting of needy businesses. And in the Dominican Republic, Holz et al assess the impact of a ‘nudge’: messages to 84,000 selfemployed and firms increasing the salience of prison sentences or public disclosure of tax evaders have large effects on increasing tax compliance. This resulted in over $100M in public revenues that wouldn’t have been raised otherwise.
And why not looking at social assistance and labor markets holistically? Carranza et al lay out policy options for Covid relief and beyond with a focus on (i) helping businesses survive and retain workers; (ii) providing protection for those who do lose their jobs; and (iii) facilitating various ALMPs. Bonus on labor markets: a fascinating anthropological perspective by Suzman on the 300,000-year case for the 15-hour week.
On a specific jobs issue… how can we improve the labor market integration of refugees and IDPs? Schuettler and Caron have a great literature review encompassing interventions in cash, vouchers, and in-kind transfers, both regularly provided and one-off injections (p.22); public works (p.36); and a variety of schemes including vocational, business and other skills training and recognition of skills; mental healthcare and psychosocial support; job search assistance, wage subsidies; and value chains.
From forced to economic mobility… what’s happening on migration? De Brauw et al find that households in Bangladesh with migrants increase female labor usage, but not female hired labor; don’t substitute female labor into “male” tasks; and do increase wages paid to male laborers. More globally, Clemens offers new evidence backing the longstanding inverse-U relationship between income and migration: “… [w]ithin low-income countries, richer people are more likely to emigrate. And as low-income countries economically grow, people are more likely to emigrate.”
On to a related topic… the UN advised that “social protection could be expanded to the informal sector, for migrant workers, and for paid and unpaid care workers”(p.7) which is part of a wider policy note on urban areas. In fact there is a visible reignition of interest in social protection in urban areas, including in humanitarian contexts – for example, more than half of WFP’s operations are now in cities; BTW, 4 UN agencies have also penned a Common Cash Statement “Q&As” brief. Bonus: analysis by Development Initiatives shows that among multilateral agencies, commitments to social protection increased by 182% in the first six months of 2020 (US$9.0 billion) compared to 2019 (US$3.2 billion) (see figure 5 in the compilation of graphs).
But these have also been a bumpy period for humanitarians. Book offers critique of the fast-emerging (tho not new) “localization” theme in humanitarian assistance: “while it reflects a certain devolution of power, the term is steeped with a sense of bestowing—something that is ‘done to’ local entities, government and communities rather than a genuine shift in authority and control”. Barnett offers a similarly hefty perspective, including “inequality through understanding of competence”, while a JDS article by Pincok et al argues that localization calls for more attention to empower local refugee-led organizations as relevant actors.
Some super gender resources! Zimmerman et al have a fantastic report on gender and digital cash transfers; UNICEF’s Innocenti Office of Research devised a brilliant conceptual framework on gender-responsive, age-sensitive social protection – the illustration on p.7 is a pure gem! Klapper makes the case for strengthening digital safety nets for women; and why not resharing the recent Peterman et al findings on gender and social safety nets in Africa, with slide deck now available.
Two great resources on education! How big are effect sizes in international education studies, ask Evans and Yuan? Looking at hundreds of robust evaluations with learning or access outcomes, the effects seem smaller than often assumed, like 0.2 for small and 0.8 for large effects. Turning to Africa, did school closures during Ebola have persistent effects in Sierra Leone? Bandiera et al show that school closures led young girls to spend significantly more time with men, teen pregnancies rose sharply, and school enrolment among young girls dropped by 17 percentage points.
Nothing on behavioral insights? Of course there are developments: check out the WBG-Ideas42 mapping of beneficiaries’ journey to effectively spend cash transfers, coupled with simple, actionable guidance for cash transfer program designers (h/t Laura Rawlings).
As we are approaching the end of this edition, here are some great read development economics reads: a discussion between Sen and Deaton, moderated by Besley, on economics and ethics; Deaton himself revisits 50 years of arguments for and especially against randomized controlled trials: “… [t]he most troubling questions concern ethics, especially when very poor people are experimented on”.
Three quick reads and news from the UK: Royal Institution Christmas lecturers explain how pandemic offers chance to pull planet back from the brink, i.e., Covid is a ‘restart button’ for climate action. The first raft (£9B) of an estimated 5.5 million UK teenagers are about to receive cash from Gordon Brown’s ‘baby bond’ child trust funds. And Sanusi Lamido Sanusi, the former Nigeria’s Central Bank Governor, will spend a year in Oxford to write a book on his experience titled ‘Central Bank Response to Global Financial Crisis: A Case Study of the Central Bank of Nigeria 2009-2013.’
Final assortment! The Labor Market Information Council collected literature relating to COVID-19 by theme and geography their annotated bibliography; the Transfer Project has a new nice repository of cash transfers resources on resilience and Covid (scroll to the bottom of the page to get directed to each); and here are two events not to miss next week: the Sept 9 webinar on child benefits and the Sept 10 seminar on gender-based violence and social protection.