Can cash transfers bolster GDP? Bracco et al provide new estimates on the multipliers of cash in 17 high income countries (HICs) and 6 LAC states. Results? For every dollar provided in cash there is a multiplier of 0.3 in HICs and of 0.9 in LAC! Why? Because transfers tend to reach “… individuals living hand-to-mouth (…) with a high marginal propensity to consume which, in turn, increases aggregate consumption and output”. In other words, tradeoffs exist, but money that reaches vulnerable populations is largely re-spent in the economy.
Speaking of LAC… always good to have handy facts: do you recall the paper I shared by Blofield et al comparing Covid responses in 4 LAC countries? It now appears as a blog showing poverty numbers with vs without cash transfers as Covid response – lets recap its findings: in Argentina, poverty increased by 0.6M people, but it would have been 1.6M without cash; in Brazil, cash actually reduced poverty (it would have increased by 5.6M in the absence of cash); in Colombia, poverty increased by 2.3M with cash (instead of 2.5M without it); and in Mexico, where cash coverage didn’t increase much, 9M additional people fell into poverty.
Another piece I shared in 2020, now in a different (in this case academic) format: the Diaz and Saldarriaga paper on Juntos cash transfers in Peru is now forthcoming in the EDCC journal – it showed that cash decreases intimate partner violence by 25-30%, with reductions in men’s alcohol use as a plausible mechanism (h/t Amber Peterman).
And yes, more LAC… I often hear claims that cash transfers never affect labor market participation or work intensity – we should be more careful and nuanced: transfers sometimes do have effects, the question is why, by how much, and whether that’s “desirable” (a much-complicated and charged question). For instance, Bergolo and Cruces estimate that in Uruguay, cash reduces participation in formal jobs by 19% for single mothers. Such decline increases inactivity and informal work to an equal extent. Note that “inactivity” may actually mean unpaid work at home!
Let’s move to Asia! More global evidence corroborating a global empirical regularity: in China, Zhou et al find that cash transfers increase children school enrollment, especially among disadvantaged groups. Yet transfers “… have no effects on academic performance or cognitive achievement”. And in India, the Karnataka government asked people possessing Below Poverty Line ration cards to surrender them if they possess five acres of land, a motorcycle, TV or a fridge (h/t Martin Ravallion).
How to monitor public works and other programs in conflict situations? Bermeo et al discuss the use of an approached called Monitoring Automated for Real Time Analysis (MARTA), especially for early warnings, beneficiaries management, and compliance monitoring functions. How does it work? Basically “… local students are equipped with smartphones and trained to fill in pre-coded weekly questionnaires about the progress of the works, the well-being of beneficiaries, and the perceptions of communities. Data is then uploaded to a secured server for remote access and analysis”.
BTW, since I mentioned fragility, Kelly has a great monthly round up of humanitarian resources (see p.4-5 for cash programming).
Interesting news on pensions – an AER article by Bau studies kinship traditions that determine daughters’ and sons’ post-marriage residences and thus, which gender lives with and supports parents in their old age: her examined policy experiments in Ghana and Indonesia show that pension policies reduce the practice of these traditions.
“What exactly makes Nordic citizens so exceptionally satisfied with their lives”, asks the World Happiness Report. Answer: “… the most prominent explanations include factors related to the quality of institutions, such as reliable and extensive welfare benefits, low corruption, and well-functioning democracy and state institutions” (h/t Alexandra Barrantes).
What’s new in labor and skills (h/t Michael Weber)? Kawaguchi and Mori find that in Japan, a minimum-wage hike raised the wages of low-wage workers, but reduced the employment of less-educated young men. A panel analysis based on matched Labor Force Survey data indicates that the minimum-wage hike decreased the job flows of prime-age men and women. Gallen and Wasserman find that in an experiment in the US, female students receive substantially more information on work/life balance relative to male students. And Bahar et al evaluate the labor market impacts of the regularization of nearly half a million Venezuelan refugees in Colombia in 2018 and find negligible effects of the program on formal Colombian workers.
Oh, before you go – if you are passionate about food security, then it’s likely you read the work of Per Pinstrup Andersen: a living legend, his latest book recollects of his exciting and impressive life, accomplishments and publications (485 in total, I counted them!)
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.