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Month: March 2018

March 2, 2018 (links edition #46)

About a year ago, India released its much-awaited Economic Survey featuring a chapter on universal basic income – or better, a quasi-UBI since it excludes the top 25% (see here). This is now the subject of Carnegie’s Khosla new book, which points to a range of upsides and bugs with the ES proposal. You can also check out a book online event featuring Justin Sandefor and Rinku Murgai (listen in particular to her insightful remarks at min 50 and 60). Speaking of UBI, Marinescu has updated two papers, now available in the NBER collection: one, co-authored with Jones, shows that the Alaska dividend program has no effects on employment overall, but increased self-employment by 1.8 percentage points; the other reviews the evidence on the US experiences with unconditional cash transfers (it is thanks to her research that I could find out proceedings from UBI conferences back in the 1970-80s).

Moving from cash transfers to vouchers, this week saw the release of two contrasting papers on the US SNAP program: a report by Wheaton and Tran found that the program lifted 8.4 million people out of poverty in 2015, reducing the poverty rate from 15.4 percent to 12.8 percent (a reduction of 17 percent). Also, SNAP reduced the poverty gap (the aggregate amount of additional income required to remove all poor families from poverty) by $35 billion (21 percent) in 2015. However, another report by Waxman et al question SNAP’s adequacy: the average cost of a low-income meal is $2.36, or 27% higher than the SNAP maximum benefit per meal of $1.86. In other words, SNAP per meal benefit does not seem to cover the cost of a low-income meal.

Let’s jump from poverty impacts to poverty dynamics. Gelders has an interesting paper documenting five stylized facts on poverty mobility in Indonesia, namely that poverty lines are somewhat arbitrary; poverty statistics usually underestimate the scale of poverty and income insecurity; moving out of poverty is not a smooth, upward journey; ‘the poor’ are not a homogenous group; and monetary and multidimensional measures do not necessarily classify the same group of people as poor. See also an accompanying blog here. Indonesia also features in another working paper by Bah et al, with a focus on the Unified Database for Social Protection Programs (which covers 25 million households). By linking administrative data with an independent household survey, they find that targeting social assistance through the database is more progressive than previous, program-specific targeting approaches.

Let’s hop again, this time from income mobility to spatial mobility: Nayyan and Kim estimate that in India labor mobility is higher than previously estimated — the stock of labor migrants increased from 16 million in 2004-05 to 60 million in 2011–12. The absolute number of circular migrants, at more than 200 million in 2011-12, is also much higher than previously documented estimates. Tracking the same households between 2004–05 and 2011-12, empirical analysis based on the India Human Development Survey highlights several socioeconomic factors associated with the migration decision: household income, the availability of information, as well as community networks in source and destination areas.

Speaking of networks, a WD article by Chemin shows that social networks play a major role in the adoption of health insurance – way more than subsidizing premiums. By reviewing 20 randomized experiments, the article documents that take-up does not increase when participants receive information about the product, or an assistance to register, or small subsidies of 2, 10, or 30%. Similarly, it does not increase when the same information is provided by local respected community leaders, when participants are offered an in-kind gift (a chicken) if they register, when participants are offered the possibility to contribute lower and more frequent payments, or the possibility to pay by cellphone. A full subsidy generates a mere 45% take-up (with no retention after one year). In contrast to these low take-up rates, presenting the same information without any subsidies to existing informal groups raises take-up to 12% (still 7% after one year), as well as trust and knowledge of the product.

A similar message runs through a paper un urban crises: an ODI report by Twigg and Mosel reviews how informal, voluntary and self-organized actions from within affected communities and their surrounding areas shape responses to urban shocks. They argue that by better understanding these actors and processes, humanitarian practitioners and policy-makers should be able to identify when and how to support them more effectively. More on urban issues. The Basic Services for the Urban Poor program in India was based on the provision of 7 entitlements – security of tenure, affordable housing, water, sanitation, health, education and social transfers in low-income settlements in the 63 cities. An ESID evaluation by Burra et al found that, in practice, the BSUP became a housing program. They also offer an interesting discussion over the choice of informal settlement upgrading, resettlement and site redevelopment (construction of medium-rise apartments). Also important, and particularly exemplified by experiences in Pune, was government’s willingness to work with civil society organizations, incorporating their expertise and skills.

Since I previously mentioned crises, with Cox Bazar now hosting 900,000 Rohingya (688,000 of whom have arrived in the past 6 months) CGD’s Huang calls for a global refugee compact for Bangladesh. The compact should rest on expanding Bangladesh’s trade preferences with the European Union, increasing opportunities for Bangladeshi migrant workers, partnering with China’s belt and roads initiative (economic corridors). On the same issue, a report by CRS mapped out the feasibility of different delivery mechanism options for cash transfers available to the Rohingya and host populations.

Let’s stay in Asia. In 2016, $851 billion was spent online in China, accounting for 15% of the country’s total retail sales (and 37% of those worldwide). Fan et al show that e-commerce benefits mostly consumers in small and remote places, helping to reduce disparities in living standards across locations – the average welfare gains are 2% for cities in the lowest population quintile and 1.1% for those in the highest quintile. More on technology: are biometric ID systems good for women? This was the question that Alan Gelb, Atika Kemal, and Debdatta Saha addressed while participating in a recent Deeply Talks panel. See also Gelb’s blog on the matter here. Bonus: Strubenhoff and Parizat have a nice Brookings post where they outline how digital solutions will transform agriculture with great benefits for smallholders.

From Asia to LAC: a paper by Morgan examines income inequality and taxation trends in Brazil. He finds that the income share of the top decile fell from 54.6% to 53% of pre-tax fiscal income between 2001 and 2015, while the share of the poorest 50% of the population rose from 10.6% to 12.6%. Brazil’s squeezed middle 40% of the distribution experienced a slight drop in its share, from 34.8% to 34.4%. An IDS paper by Roelen and Muller presents baseline findings from a quantitative evaluation assessing the impact of of the Haiti graduation program, or Fonkoze’s Chemen Lavi Miyò (CLM), on child wellbeing in the island.

More on children and human capital. Jones et al have an interesting paper on “catch-up growth” in anthropometric outcomes among children. The paper distinguishes between catch-up in the mean of a group toward that of a healthy reference population versus catch-up within the group, associated with a narrowing of the outcome distribution. This distinction enabled between- and within-group forms of catch-up to be tested in a unified setting. In particular, their results reveal significant differences in the nature, extent, and drivers of catch-up growth across the four Young Lives countries (i.e., Ethiopia, India, Peru, and Vietnam).

Final fireworks: Shanta’s monthly selection of development reads and Ravi Kanbur’s overview of the international panel on social progress report. Compromising over 300 researchers, the panel investigated the reasons of contemporary societal anxieties, and what to do about them.