Cash transfers can make us smarter! A new Nature article by Weissman et al studies whether children’s brain mass (hippocampal volume) in the United States can be affected by income support. In particular, the authors examine the level of cost of living and the generosity of a state-level social assistance for low-income families, including cash-based programs like EITC and TANF as well as Medicaid. The paper found that beneficiaries in states with high cost of living and high cash benefits (i.e., mean monthly cash transfers of $531) have hippocampal volumes on average 60 mm3 larger than those of low-income beneficiaries living in similar states but receiving low cash benefits (i.e., mean cash transfers of $317/month). Following the article, “… more generous cash benefits at the state level are associated with income disparities in hippocampal volume that are about 34% lower in states with high (vs. low) cost of living”. BTW, similar results to cash-based safety nets were found in relation to minimum wages.
But what do we know about US income support for the unemployed? A report by OECD shows that US coverage of unemployment insurance (UI) is low by high income country standards: only about 40% of low-income individuals who are long-term jobless (6+ months) receive any transfers – a level like Korea or Greece’s, but less than half of many European countries’. Benefits expire quickly (US duration is about 6 months vs 17 months in the OECD); payment levels vary, but are low overall (only 10% of median income); and long out-of-work spells constraint access to benefits (almost two in three jobseekers do not qualify for UI payments as out of work for over 26 weeks). Options to enhance the system? An extension of UI to self-employed workers, a softening of the requirement of involuntary unemployment as a pre-condition of UI receipt, “levelling up” of benefit amounts and maximum durations across states, and consideration of an unemployment assistance benefit for jobseekers without a recent history of employment.
It’s not just about benefits, but also taxes: Baudisch and Neuenkirch evaluate Germany’s temporary reduction of value-added tax (VAT) as a way to stimulate consumer spending during the pandemic. Their findings show that the policy was relatively ineffective compared to targeted direct cash transfers. This is because the latter are “… more comprehensible, salient, and actionable” in contexts of high uncertainty like COVID-19.
Speaking of crises, this tech innovation is quite interesting: Indonesia’s center managing geological and vulcanological risks developed a platform called “Magma” (Multiplatform Application for Geohazard Mitigation and Assessment) that can support various phases of humanitarian assistance. And BTW, an article by Loy shows that foreign aid to least developed countries actually fell in 2022.
Indonesia is also part of a trio of conditional cash transfer studies: Apriansyah and Ikhwan discuss the meaning of “independent graduation” among CCT beneficiaries in the Pagar Dewa sub-district; Agulia et al show that Mexico’s Progresa (yes, there is still research on it!) had significant benefits in terms of improved hypertension diagnosis and use of treatment drugs; and El-Enbaby et al synthesis findings from Egypt’s Takaful evaluation, including documenting that beneficiary households paid down debts and invested in assets.
Bonus on Egypt: a paper by Breisinger et al outlines the dilemma with alternatives to large scale food subsidies in the country: “in all the scenarios… it is not possible to improve consumption for both poor and non-poor, which implies that certain resistance to reforms is likely”.
Let’s go deep: how to affect mindsets? Based on interviews with 25 Zambian Members of Parliament (and 16 others with donors and NGOs), a paper by Kuss and Gerstenberg illuminates the complicated relationships between national and international actors engaged in social protection. Basically, the authors found that “… MPs remained ambivalent towards [cash transfers] and retained their core beliefs around social justice and redistribution… Zambian MPs do not deem SP as a core part of the social contract”. It’s growth, instead, that occupies a premier space in perceived state responsibilities. In other words, the article shows that donor-sponsored learning initiatives aren’t changing the deep held views of MPs around redistribution, and that policymakers simply leverage donor assistance (via “foregrounding policy narratives”) for supporting their constituencies.
More on Africa: an updated version of the paper by Kohler et al shows that South Africa’s pandemic wage subsidies (the Temporary Employer-Employee Relief Scheme) increased the probability of remaining employed in the short-term by 15.6 percentage points – that is, the policy saved 2.7 million jobs during April and May 2020. Biggest problem? Not much the high cost ($1,851 per job/month), which compares relatively favorably to other countries; but most significantly, two-thirds of recipients would have remained employed even in the policy’s absence (the famous wage subsidies “deadweight” risk) (h/t Tim Kohler). Bonus on wage-based interventions: a 30-min interview with Alik-Lagrange covers the Londö public works program in the Central African Republic (h/t Paul Bance).
Since I mentioned costs… one of the many aspects that I love about the education community is its thorough cost-effectiveness benchmarking. A paper by Angrist et al assesses the experimental evidence on remote instruction for primary school children during COVID-19 in India, Kenya, Nepal, Uganda, and the Philippines. They found large effects on learning, with average effect size of 0.30-0.35 standard deviations. These effects are highly cost-effective, delivering up to four years of high-quality instruction per $100 spent (putting the intervention in the top performance percentile of education measures). Intervention provided by NGO instructors or government teachers had similar impacts, “… indicating scalability within government systems”.
Final assortment: Standing gives a talk at the ILO on “The Blue Commons”, where he discusses the sustainable use of marine resources and basic income; “reducing the global burden of anemia must become our shared goal as a development community”, argues a piece by Osendarp et al; and the new WBG food security update is out (v May 4).
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.