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Month: April 2018

April 13, 2018 (links edition #52)

Plenty of papers on cash transfers coming out this week! Let’s start with the perennial question on whether transfers affect work incentives… do they really do so? Not much. A new review by Baird et al shows that cash programs provided without an explicit employment objective (like most conditional and unconditional cash transfers) tend to result in little or no change in adult labor decisions. The main exceptions are in some cases adults living with seniors receiving pensions (although this may include contributory pensions) and select refugee programs (although for a limited extent and in risky locations). Check out tables 1 and 2 (p.26-27) for handy summaries of the evidence by program type and impact channel.

From employment to child labor: a WIDER working paper by Canelas and Niño-Zarazua found that the Bolivian CCT Bono Juancito Pinto increased school enrolment rates, but had no impact in reducing child labor. For the latter, they offer two explanations: one is that the monetary value of the CCT is too low to compensate for opportunity costs of schooling, particularly among cohort aged 13–16 years. Also, the structure of the education system, normative factors, and a limited legal framework regulating child labor may allow children to combine schooling with work.

From conditional to unconditional transfers: an AER article by Akee et al evaluate the effects of a cash transfer program among Cherokee Native American children. They found large effects on children’s emotional and behavioral health, as well as personality traits: the UCT reduced behavioral disorder symptoms by 23% of a standard deviation, and increased conscientiousness by 20%. These impacts were most pronounced for children with the lowest initial endowments. The intervention also resulted in improvements in parental relationships, which the authors interpret as a potential mechanism behind the findings.

More on a particular variant of unconditional transfers, universal basic income: how would firms respond to a UBI? In a new article, Calnitsky sets out two scenarios: either a UBI would be an employer subsidy facilitating low wages, or it would tighten labor markets and pulls wages up. Examining the Canadian Minincome experiment in the 1970s (all residents in the town of Dauphin received cash), he found support for the second scenario. The paper also offers an interesting overview on the broader conditions under which a basic income might increase or decrease wages.

From labor markets to household violence: do cash transfers decrease violence among partners? A UNICEF review by Buller et al examined 14 quantitative and 9 qualitative studies on the matter. Out of these, 7 and 6 respectively demonstrated evidence that cash transfers decrease violence. Programs appear to reduce physical and/or sexual violence more consistently than emotional abuse or controlling behaviors. This could in part be due to measurement issues, as emotional violence was less measured and definitions varied. Only two studies showed mixed or adverse impacts. The gender of cash recipient also matters: while evidence is scarce on the impact of recipient sex on economic and human capital outcomes, the examined studies tended to transfer cash to women; therefore, a large gap in knowledge remains with respect to impacts on violence when men are the main recipient.

Returning on employment matters, the 2018 edition of ADB’s flagship Asian Development Outlook focuses on technology and jobs. The report, just released, shows that, over the past 25 years, the region created 30 million jobs annually. In general, it seems to take an optimistic view of technology – i.e., it estimates that rising demand will offset job displacement.  Among the many recommended policies, it calls for strengthening social protection “… in terms of unemployment benefits, expanded health insurance, public works programs, and income transfers”. Bonus on an Asian country: Booth has an ODI blog distilling four lessons from problem-driven iterative adaptation (PDIA) in Nepal’s economic policy incubator initiative (he also mentions that last year’s most important development book was Lin and Monga’s ‘Beating the Odds’).

Finally, Brian Caplan lays out Pritchett’s 6 key things that the development community should care more about (h/t Michal Rutkowski): the one that perhaps best summarizes his thought is that “… today there is too much attention to inequality within poor countries and not enough to the very low levels such that things are pretty bad even for the, say, 80th percentile”. BTW, few weeks ago, I shared a video of Lant’s talk on the RCT debate (which he claims, “is over”). The slide deck and excerpts of the event are now available here.