Can cash transfers increase trust that citizens bestow upon their government… and even help it work a little better? Yes they can, according to a new paper (and accompanying blog) by Evans, Kosec and Holtemeyer. In 2010, Tanzania launched a pilot conditional cash transfer program, with a randomized roll-out in half of a set of 80 villages. After 2.5 years of transfers, beneficiaries – relative to potential beneficiaries in the waitlisted villages – report a stronger belief that their elected village leaders can be trusted in general, but not their appointed bureaucrats. Beneficiaries are more likely to report that local government leaders take citizens’ concerns into account, and that their honesty has improved over time. Notably, this increased trust does not translate into political activity. Beneficiary households are no more likely to vote in Village Council elections, or attend more Village Council meetings. The research even suggests that the program improves record keeping in the government, but only in sectors linked to transfers (education and health).
What do we know about the impacts of cash on children? Mishra and Battistin review the effects of cash on children’s health, food security, nutrition, protection, and education. The findings are in line with the core knowledge base – i.e., positive impacts on direct measures (e.g., school enrolment/attendance), with effects becoming less consistent for indirect and complex outcomes (e.g. child anthropometry, etc.). Results in the stocktaking are nicely unbundled, structured and presented, including two detailed appendices of reviewed studies and summary evidence. Another new paper on cash: a JDE article by Handa et al evaluates the long-run effects of two cash transfer programs in Zambia. These sparked an average income multiplier effect of 1.67, with effects generated through investment in non-farm activity in one case, and agricultural output in the other.
A modest transfer of about $1/month can significantly reduce child marriage in Bangladesh. Goldstein has a nice blog about a paper by Buchmann et al examining alternative strategies to reduce child marriage, teenage childbearing and increase girls' education. In an RCT starting in 2008, girls in treatment communities received either i) a six-month empowerment program, ii) an in-kind transfer to delay marriage, or iii) empowerment plus transfer. Data from 15,739 girls, 4.5 years after program completion show that girls eligible for the incentive for at least 2 years were 25% less likely to be married under 18, 16% less likely to have given birth under 20, and 24% more likely to be in school at age 22. The empowerment training had no significant impact, and the combination of training and the transfer had no impact beyond the transfer (the in-kind transfer was cooking oil to encourage parents to postpone a daughters' marriage until the legal age of consent - 18). The value of the incentive was approximately $16 per year, an amount chosen to offset the estimated financial cost of a higher dowry).
The State of the World’s Cash Report is out. Just published by CaLP, it offers a range of interesting estimates on the magnitude, usage, and coordination of cash and vouchers in humanitarian contexts. Among the findings, it is worth noting that in 2016 cash-based responses totaled $2.8 billion, an increase of 40% from 2015. In other words, cash now represents 10.3% of the $27.3 billion humanitarian assistance. I also found particularly interesting that, in a survey among nearly 400 humanitarian practitioners, only 28% believe that “… national/local actors are appropriately involved in the coordination of humanitarian cash transfers” – a central issue in social protection and one that is motivating a stream of research in our group (more to come in future newsletters).
Do CCTs have lasting impacts on participants’ jobs? Last year, a comprehensive review by Parker and Todd (here) concluded that we don’t know enough about the long-term effects of CCTs, specially on employment. Now a much-debated NBER paper by Kugler and Rojas begins to break down that glass ceiling: using household surveys between 2003 and 2015 (note the high attrition rate of nearly 80%), they show that children with greater time of exposure to CCTs had significant increases in educational attainment (a finding in line with Stampini et al’s research on Jamaica’s PATH), as well as finding positive impacts on the likelihood and quality of employment.
The hype around the Kugler-Rojas paper is tempered by a more cautious new meta-analysis of CCTs by Garcia and Saavedra. Reviewing the impact and cost-effectiveness of 94 studies from 47 programs, the authors find that educational effect size estimates for longstanding interventions are “statistically indistinguishable from those of pilot 1- or 2-year CCT programs”. Surprisingly, they “… do not find evidence consistent with stronger effects for transfers that target mothers”, and that “effect sizes are greater when other schooling conditions, such as grade promotion or test scores, are imposed on beneficiaries, beyond the typical requirements of enrollment and minimum attendance”.
An interesting, quantitative IZA discussion paper by Hann et al examines how the German tax-and-transfer system reduces inequality of lifetime income through redistribution and insurance functions. Based on a dynamic life-cycle model, they found that redistribution offsets between 50-60% of the inequality in lifetime earnings due to differences in skill endowments, employment, and health risk. In particular, the social assistance component alone reduces within-endowment inequality (insurance function) by 36%, and that of between-endowment (redistribution) by 19%.
The International Social Security Review journal has a special issue with 6 (ungated) articles on human rights and social protection. I particularly enjoyed the piece by Alfers et al that explores how to reconcile ‘productivist’ and rights-based approaches in informal settings.
A new paper by Lieber and Lockwood assesses the cash vs in-kind debate in the US, with a large-scale experiment on Medicaid home care services. In particular, they quantify the trade-off posed by in-kind transfers in terms of better targeting vs less preferred by beneficiaries. The results indicate that the targeting benefit exceeds the moral hazard costs, and concluded that “… the main alternative – using more cash transfers – appears to be much less effective in this context”.
Some further research on the US, this time on pensions. An NBER paper on pensions by Bronshtein et al assesses the relative strengths of working longer vs. saving more in terms of increasing a household’s standard of living in retirement. The basic result is that, in the US, delaying retirement by 3-6 months has the same impact on retirement welfare as saving an additional 1 percentage point of labor earnings for 30 years.
How can a universal basic income be funded in the States? A new Bill proposed by US Reps Van Hollen and Beyer caps fossil fuels, requires energy companies to purchase pollution permits at auction, and returns all the auction revenue in equal amounts to every US resident with a valid social security number.
Speaking of basic income, Marinescu has updated two papers, now available in the NBER collection: one, co-authored with Jones, shows that the Alaska dividend program has no effects on employment overall, but increased self-employment by 1.8 percentage points; the other reviews the evidence on the US experiences with unconditional cash transfers. (It is thanks to her research that I could find out proceedings from UBI conferences back in the 1970-80s). Bonus: watch Guy Standing, Stewart Butterfield and Min Shafik debating universal basic income in Davos.
From US to Africa: the 2nd edition of the Zambia Social Protection Week focused on “Inclusive Sustainable Social Protection: Leaving No One Behind”, with a rich set of 33 presentations available here examining the links between social protection and agriculture, disability, aging, local multipliers, and more.
From Africa to Central Asia: ODI and UNICEF produced an interesting 110-page report and brief on options to enhance targeted social assistance in Kazakhstan. Among the findings, it appears that communication and awareness of programs is limited, with only 24% of survey respondents having heard of the targeted social assistance.
This monthly column draws from a weekly newsletter – to join send me an email: (ugentilini@worldbank.org). The January edition of the column can be accessed here.
Join the Conversation