Activities of the Temporary Income Support Program, or PATI / World Bank
With collaboration of Emma Monsalve.
The 2008-09 financial crisis significantly affected El Salvador. The economy, as measured by gross domestic product, contracted 3.1 percent in 2009. The crisis seriously affected employment: between 2008 and 2009, more than 100,000 Salvadorans, or 3 percent of the labor force, became unemployed or under-employed.
Aiming to mitigate the effects of the crisis, the Government of El Salvador launched a new safety net program called Programa de Apoyo Temporal al Ingreso (Temporary Income Support Program, or PATI in Spanish). The program had two goals. One was to provide short-term income support to poor and vulnerable individuals in urban areas. The other was to increase medium-term employability by offering training and opportunities for beneficiaries to gain experience working in productive social activities.
The PATI program provided each participant with a cash benefit for a maximum of six months, conditional on participation in community work projects, occupational training, and labor market orientation courses. Eligible beneficiaries had to be at least 16-years-old and neither studying nor working. The program also gave priority to women who were heads of households. Between 2010 and 2015 (the year that was phased out), PATI benefited 43,000 people, of whom around 40 percent were in the 16 to 24-year-old age range, and more than 70 percent were females.
The program was implemented mostly in urban settlements with high incidence of poverty and unemployment, but not necessarily with high levels of violence and crime, as these characteristics were not part of its targeting strategy. This is particularly relevant as El Salvador has one of the highest homicide rates in the world. Figures for 2015 show that El Salvador has the second highest homicide rate in the world, with 108 homicides per 100,000 habitants, which is far above the world average of 6 homicides per 100,000 inhabitants.
We know from previous studies that while there is only a weak link between adult unemployment and crime, youth unemployment is consistently positively correlated to the homicide rate. Therefore, despite PATI not having targeted the most violent municipalities, program implementers naturally expected it to have an indirect effect on reducing violence since the majority of beneficiaries were youth who were neither studying nor had formal work. But overall, the evidence on how temporary employment programs affect crime is very scant. Only two recent papers have analyzed the topic and show mixed results for India, and Papua New Guinea.
We decided to test this hypothesis by cross-relating rollout of the PATI program and the incidence of different types of crime (property crimes, murder, homicides, rape, and so on, as reported to the national police monthly) in each of the 263 Salvadoran municipalities. The result is a study that shows that the rollout of the program across El Salvador was associated with a reduction in most crime rates, except for rape and robbery. In periods where the program operated at the municipal level, the total crime rate was on average 8.6 crimes per 100,000 inhabitants lower than in municipalities without the program.
The study suggests the PATI program seemed to have a larger effect in reducing theft and extortion, followed by injury and homicide. These results support the idea that PATI helped supplement low income earners, and thus reduce mostly economically motivated crimes. We also believe that the reduction in the rate of homicides, a non-economically-motivated crime, could be due to social capital factors influenced by the community participation nature of the program, as well as its intense work requirements, which potentially implied less time to undertake illegal activities. Strong crime reducing effects may also be the result of the fact that most of PATI’s beneficiaries were females and youths from an age group particularly at a high risk of engaging in antisocial and criminal behavior.
In summary, while PATI was not specifically designed to prevent crime, it seems to have had a significant and important effect in reducing violence and crime levels in fragile municipalities of El Salvador. The study shows that the effects of a temporary employment program can extend beyond the usual ones affecting incomes or labor market outcomes. Such programs can also complement critical preventive measures to reduce conflict and crime. This invites us to reflect on the approaches that can be taken (or ‘the tools that can be brought to bear’) in a country such as El Salvador, where the scourge of crime is abruptly ending many young lives and tremendously diminishing the development potential of the country.