How long do the effects of cash transfers last? A paper by Blattman et al found that after nine years from inception, cash grants for young-adults in Uganda had lasting impacts on assets and skilled work, but had little eﬀect on mortality, fertility, health or education. See Ozler’s nice blog dissecting the study. A paper by Barham et al found that, after 10 years from inception, conditional cash transfers in Nicaragua did not lead to long-term impacts in learning, but did yield significant impacts on nutrition (body mass index), fertility, and subsequent labor market outcomes and income.
universal basic income
Let’s start with social protection in Africa. A new paper by Kagin et al. estimates that in Malawi, each Malawi Kwacha (MK) transferred through the Social Cash Transfer Program generates 1.88 MK, while multipliers of public works are between 2.9-3.24 MK. In the same country, the Malawi Economic Monitor by Kandoole et al. has a very crisp, insightful edition discussing safety nets, e.g., spending is only 0.6% of GDP compared to 2% of input subsidies, and almost 6% on humanitarian aid.
Being poor often means being hurt twice: Kenny and Sandefur have a CGD commentary replicating CEQ analysis and showing that tax-transfer systems reduce inequality in the rich world, but often exacerbate poverty in the poorest countries. In 4 of the 5 Sub-Saharan African countries where CEQ data is available, the net effect of taxes and transfers was an increase the number of people living below the absolute poverty line. In Tanzania, poverty is nearly 20 percent higher due to taxes and transfers.
Let’s start with the perennial question on whether cash transfers affect work incentives… the answer is yes but not by much. A review by Baird et al shows that programs tend to result in little or no change in adult labor decisions. The exceptions are adults living with seniors receiving pensions and on select refugee programs (although to a limited extent and in risky locations). Check out tables 1 and 2 (p.26-27) for handy summaries of the evidence. Similarly, Daidone et al. found significant impacts of the Zimbabwe Harmonized Social Cash Transfer Program on beneficiary agricultural activities, the share of households owning livestock, and non-farm enterprises.
Plenty of vibrant discussions on the role of cash transfers in the ‘graduation’ agenda…
Banerjee et al are back with a new NBER paper on the classic graduation model (a package of assets, training, coaching, and savings). They explore two variants: whether the transfer of assets only would generate similar impacts, and whether access to a savings account and a deposit collection service would generate comparable impacts. Neither outperforms the holistic package. Similarly, a CSAE paper by Sedlmayr et al assesses graduation variants in Uganda--the full package of transfers and training, only the transfers, transfers with only a light-touch training and just attempting to boost savings. They find that cash only was less effective than the more integrated interventions.
- At VoxEU, Martin Ravallion discusses how many of the arguments against universal basic income are really about strawmen that overstate the effectiveness of targeted transfers.
- Bruce Wydick on fake news, narrative, science and truth.
- The new issue of the Journal of Economic Perspectives has a symposium on recent ideas in econometrics, including (among others) Athey and Imbens on Causality and Policy Evaluations; Low and Meghir on Structural Models; and Mullainathan and Spiess on machine learning.