Published on Let's Talk Development

What’s new in social protection – October edition

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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. 

Conversely, when beneficiaries ‘exit’ a program, have they really ‘graduated’ out of poverty? A JEL article by Villa and Nino-Zarazua finds that in Mexico, only one-third of conditional cash transfer beneficiaries that were poor in 2002 exhibited low probabilities of becoming poor in 2009–12 (i.e., they are ‘true graduates’ of the program). They recommend the recertification process of the program—which takes place every three years—to occur every 3.7 and 5.1 years in urban and rural areas, respectively.
Are monthly payments spent differently than lump sum transfers? Yes, according to a piece by Morton on Brazil’s Bolsa. Indeed, surveyed women typically spend monthly cash assistance on items like clothing and furniture; by contrast, large and less-predictable lump sums are used to purchase income-generating assets, like cows and fields.
What is the comparative impact of gratuitous cash grants versus grants provided as credit? New evidence from Ethiopia by Tadesse and Zewdie shows that returns on grant-based livelihood investments are between 0.09 and 0.14 percentage points higher than loan-based programs. Unlike loans, the failures and success of investments using grants are fully born by the households, hence users may take risk to invest in high-payoff but risky livelihoods.
Can cash transfers reduce violence? A review by Buller et al shows that only 2 out of 22 studies find mixed or adverse impacts; the positive evidence was stronger for physical and sexual violence, and less conclusive for emotional or psychological violence. However, effects are insignificant for two-thirds of the 56 reviewed indicators. Relatedly, what do we know about the effects of cash transfers on gender empowerment? A vivid collection of papers by CaLP explores the question in humanitarian contexts, including by stocktaking the evidence and presenting case studies from Africa (Malawi, Niger, Kenya, Zimbabwe).
Can social assistance reduce malnutrition? A WD article by Levasseur on urban Mexico shows that conditional cash transfers kept obesity levels stable, while they increased among non-participants. Still in Latin America, Iannotti et al show that in Ecuador, providing children of 6-9 months of age with one egg per day for 6 months reduced the prevalence of stunting by 47% and underweight by 74%. A new paper by McIntosh and Zeitlin compared cash and in-kind transfers in Rwanda. The latter was 118% more effective at bolstering savings than cash, but it didn’t affect stunting nor maternal anemia. An equivalent amount of money led to small increases across many consumption outcomes, and significantly increased the paydown of debt, as well as production and consumption assets.
Several resources on universality: my blog distills lessons for social protection from universal health coverage, one of which is that universalism doesn’t necessarily make the poorest better-off. Indeed, a paper by Hanna and Olken shows that in Indonesia and Peru, existing targeted schemes are more welfare-enhancing than a Universal Basic Income (UBI). In fact, the shape of existing tax-benefit structures matters for poverty reduction: Inchauste and Militaru estimate that in Romania, taxes are poverty-increasing, neutralizing the effects of cash transfers; conversely, a working paper by Maboshe and Woolard found that in South Africa direct taxes and targeted cash transfers are progressive. An article by Alik-Lagrange and Ravallion on India argue that a guaranteed jobs scheme (NREGA) is more “poor-poor” in targeting performance, but this doesn’t counter the welfare loss from work requirements. As such, a UBI “… dominates NREGS for a given total outlay on workfare wages”. Bonus: the city of Chicago announced the creation of the Chicago Resilient Families Task Force to explore the viability of a UBI.
A new ILO report shows that the number of countries with pensions schemes increased since 2000, and that non-contributory social pensions have been key in such a rise. Yet the adequacy of social pensions is limited: out of 37 countries, 20 provide transfers for less than half the national poverty line (e.g., India, Turkey and Russia). In terms of contributory pensions, in Sub Saharan Africa only 6.3% of the working-age population contributes to a scheme – a rate that goes up to 76.2% in Northern America. Some of these issues are picked up in Rutkowski’s blog on the future of social protection, offering insights on the changing nature of work, informality, ‘progressive universalism’, balanced labor regulations, and how to extend support to the many uncovered worldwide.
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Ugo Gentilini

Global Lead for Social Assistance, World Bank

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