Cash transfers can alleviate poverty-induced stress; but can they also increase it? A new working paper by Jaroszewicz et al shows that cash can augment stress indeed. The study compared the effects of two transfer amounts among over 5,200 low-income people in the US, namely a one-time unconditional cash transfer of $500 (about half a month’s worth of median household income) versus a one-off UCT of $2,000 (two months household income). A control group received nothing. Results show that cash was spent wisely, it improved various objective outcomes for the few weeks following the transfer, but these dissipated thereafter. Moreover, both cash groups reported significantly worse outcomes on some psychological measures, among others. In other words, “… while the cash did not actually produce worse outcomes in some objective sense, in some situations it made recipients feel worse” (p.4). Why? Because cash shifted how beneficiaries thought about their needs after they received the UCT, and the relatively limited money “… may have made their needs—and the gap between their resources and needs—more salient” (p.5), and these made people more stressed about how to use their cash. My haunch: this is not a case against cash; rather, it shows that transfers operate within a web of hopes, dynamic needs, pressures, and expectations. These don’t often receive full attention and yet they do matter for outcomes.

Another paper on a big theme: Asenjo et al by lay out the evidence around connecting social assistance and alternative activation labor market policies (e.g., trainings, public works, wage subsidies). Specifically, they review expected theoretical effects on labor demand, supply, quality of matching, in-work poverty reduction, and work quality (see table 1, p.11), and then contrast those assumptions with available empirical evidence. Such knowledge base is used to identify “barriers and facilitating factors” for program success (see table 2, p.32). Key conclusion? There is a disconnection between theory and evidence, and performance hinges on “… correct identification of target groups and their assured participation; quality of service and strong linkages between income support and ALMPs; and sufficient institutional capacity and financing”.

What about work opportunities for people with disabilities? A metanalysis by Hunt et al examines of 10 studies on 9 livelihood programs for people with various forms of disability in low- and middle-income countries. It found that “… social protection interventions were most glaringly absent” (see table 6, p.23). Ouch!

The cash transfers and education festival! Evans et al have a handy excel database of 101 studies examining the education effects of conditional cash transfers (as captured in reviews by Bastagli et al 2016 and Baird et al 2014). The database describes heterogeneous treatment effects in each study, and guides where to find those impacts in each paper. About 70% of recorded studies disaggregate results by gender and age, but a similar share doesn’t do so for income and location (urban/rural).

Since I mentioned gender, in Kenya an evaluation by Brooks et al assesses the effects of a one-off cash transfer for female microentrepreneurs in urban informal settlements in Nairobi. The transfer was of $50 (or about 1 month of profits) and was provided at the early stages of Covid19. Results? Such assistance helped recoup about one-third of initial losses that occurred between Jan-May 2020.

More on human capital: an article by Premand and Barry compared cash transfers and parenting training on early childhood development (“BCC” activities) in Niger. They findings show that cash alone triggers no change in parenting practices, but it does increase dietary diversity at household level; in contrast, BCC improves parenting practices on human capital, generates some spillover to other people not participating in the program; and directs more resources towards children, whose dietary diversity increases.

Speaking of food security, let me lay out my four takeaways from the FAO et al’s flagship state of food security and nutrition report 2022: 1) the number of undernourished people soared by 150 million during the pandemic (2020-21); 2) some 3.1 billion people can’t afford a healthy diet (as per 2020); 3) food and agricultural subsidies accounted for $630B/year over 2013-18 – here check out the really neat discussion on the mechanics of subsidies (BTW, guess who subsidizes the most? Subsidies in HICs account for 24% of rich countries’ total production value! See fig 19, p.63); and 4) repurposing subsidies from producer to consumers (of agricultural products whose consumption is low relative to nutritional guidelines) would enhance GDP across regions and country income groups. An exception is “…. LICs (particularly in Africa) which lose marginally because most of these countries are net food-importing countries facing higher prices” (see figure 23, p.102).

Moving to displacement issues, UNHCR documents an interesting set of examples about how refugees and IDPs are included into national social protection and other services and activities. This also includes evaluations of labor market effects of Venezuelan migrants in Colombia, a graduation program for refugees and hosts in Mozambique and several examples on tracking wellbeing of displaced populations.

Let’s conclude with a series of short notes: a seven-point piece by Ravazi et al reviews the recent targeting book by Grosh et al; Bird has a one-pager about his public expenditure review on social protection in Sri Lanka (where the government spends 0.63% of GDP on social assistance and 1.97% on social insurance); IPC-IG and WFP issued a one pager on adaptive social protection in Mozambique; and the IPC-IG has a wonderful compilation of 100 one-pagers!

 

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 help you stay on top of it — succinctly, regularly and frequently. Previous editions can be found here. 

To sign up to the newsletter or share materials, you can contact Ugo by email ([email protected]), Twitter (@ugentilini) or LinkedIn.

Social Protection Programmes: 
  • Social assistance
    • Social transfers
      • Cash transfers
        • Conditional cash transfers
        • Unconditional cash transfers
  • Social insurance
  • Labour market / employment programmes
    • Active labour market programmes / Productive inclusion
    • Passive labour market policies
      • Unemployment benefits
Social Protection Building Blocks: 
  • Policy
    • Governance and coordination
    • Situation analysis / needs assessment
  • Programme design
    • Targeting
  • Programme performance / impact analysis
Social Protection Approaches: 
  • Adaptive social protection
  • Gender-sensitive social protection
  • Shock-responsive social protection
  • Social Protection Floors
  • Social protection systems
Cross-Cutting Areas: 
  • Agriculture and rural development
  • Disability
  • Food and nutritional security
  • Health
    • COVID-19
  • Poverty reduction
  • Resilience
  • Climate change
  • Humanitarian assistance
Countries: 
  • Ethiopia
  • Kenya
  • Mozambique
  • Nigeria
  • Brazil
  • Colombia
  • United States
  • Venezuela
  • Bangladesh
  • China
  • India
  • Sri Lanka
  • Vietnam
Regions: 
  • Global
The views presented here are the author's and not socialprotection.org's