Welcome to a carioca links edition! Do cash transfers disincentivize employment in Brazil? Gerard et al show that an increase in Bolsa cash coverage of 13.6% led to a 2% growth in private sector formal employment (especially low-skill jobs). How? Cash transfer multiplier effects in the local economy counterbalance potential negative effects on formal labor supply. The results broadly echo another great paper: the World Bank estimates that among Bolsa participants opting to remain longer in the program (a possibility for those that voluntarily update their income information in the social registry), over half of them is already in the labor market (p.22). The program’s incentive-compatibility is ensured by low benefits levels (representing only a quarter of recipients’ income) and comparatively low participation tax rates (or the share of earnings lost by beneficiaries when accepting a minimum wage job, which is only 10% for Bolsa relative to OECD’s average of 51%).
Since I mentioned benefit levels… are Covid cash transfer responses in Latin America sufficiently generous in size? A new paper by Blofield et al examines data spanning a full year (April 2020-March 2021) and shows that adequacy of regional emergency responses varies over time and space: countries like Brazil and Colombia, for instance, increased transfers’ size dramatically at the early stages and then aligned them to pre-Covid levels. Instead, Argentina, Bolivia, and Chile also show such reverse-U trajectory, but transfers eventually stabilized at a higher size than in 2020. Were there countries where transfers were increased and never declined? Yes, Uruguay and Peru (see figure 2, p.5).
I didn’t mention the Caribbean yet, so here we go: in the late 1980s, Jamaican stunted children benefited from early childhood stimulation to improve nutrition and quality of mother-child interactions. A fantastic paper by Gertler et al estimates that at age 31, those children had 43% higher wages and earned 37% more than the control group. Bonus on nutrition: a great review (109 pages!) by Olney et al lays out conceptual entry points and recent empirical evidence on social protection, nutrition and food systems.
That’s it with the LAC region? Only in part… Brazil and Chile feature alongside India, Russia, and South Africa in a new paper quantifying tradeoffs in universal basic income: by how much should taxes be raised in those countries in order to finance a UBI that wipes out poverty? By at least 25% according to estimates by Enami et al, hence raising a range of challenging and fascinating distributional and political economy questions around UBI.
Speaking of taxes… can nudges help with property tax compliance? Collin et al have an experiment in urban Tanzania where landowners received one among 3 types of text messages: a reminding to pay taxes, or one highlighting the connection between taxes and public services, or another communicating that non-compliers were not contributing to local or national development, or no message at all (control group). Three results stand out: recipients of any message were 11% more likely to pay any property tax, the second type of messages delivered the highest payments, and the average benefit-cost ratio across treatments was 20:1!
And of course funding is a core area of debate in the humanitarian sphere: a new brief summarizes findings from multi-year research by Saez et al on Rethinking Humanitarian Reform at CGD. Main recommendations? Adopting a people-driven response, using area-based models of frontline coordination, resource the humanitarian system as a public good provider, and adapting the sector’s governance.
But how to map financial service providers for cash transfers in humanitarian crises? Bersten and Chamaa share their tips from a mapping exercise in Yemen. And are there new metrics on how to assess mobile money prevalence? A new index by GSMA does exactly that by ranking 98 countries (h/t Mohamed Almenfi).
Since we are approaching the end of the edition, it’s time for reflections: Barca has a blog distilling implications of social protection covid-19 responses for future crises; Veras Soares et al lay out their take-aways in a one-pager; and a 4-minute SPACE animation showcases countries social protection responses to the pandemic.
Final roundup: in Japan, Fukai et al estimate that the employment rate of married women with children decreased by 4 percentage points, while that of those without kids decreased by only 1 pp; a terrific set of papers will be discussed at the NBER/BREAD Fall Development Economics conference (October 22), while 32 handy findings from the Global Education RISE Conference 2021 are already laid out by Evans.
Ugo Gentilini is from the World Bank’s Social Protection & Jobs global practice. The Social Protection Links newsletter, issued every Friday, distills and discusses a selection of curated resources on the topic, from academic articles to podcasts. The blog is republished on socialprotection.org each week, offering knowledge on social protection to helps you stay on top of it — succinctly, regularly and frequently. Previous editions can be found here.