A new paper on the labor effects of cash transfers
SARAH BAIRD, DAVID MCKENZIE, and BERK OZLER of the WORLD BANK review a variety of cash transfer studies, both governmental and non-governmental, in low- and middle-income countries. Cash transfers aren’t shown to have the negative effects on work that some fear:
“The basic economic model of labor supply has a very clear prediction of what should be expected when an adult receives an unexpected cash windfall: they should work less and earn less. This intuition underlies concerns that many types of cash transfers, ranging from government benefits to migrant remittances, will undermine work ethics and make recipients lazy.
Overall, cash transfers that are made without an explicit employment focus (such as conditional and unconditional cash transfers and remittances) tend to result in little to no change in adult labor. The main exceptions are transfers to the elderly and some refugees, who reduce work. In contrast, transfers made for job search assistance or business start-up tend to increase adult labor supply and earnings, with the likely main channels being the alleviation of liquidity and risk constraints.”
Link popup: yes to the working paper. Table 2—which covers the channels through which cash impacts labor, is especially worth a read—as many studies on cash transfers don’t go into this level of detail.
- A study on a large-scale unconditional cash transfer in Iran: “With the exception of youth, who have weak ties to the labor market, we find no evidence that cash transfers reduced labor supply, while service sector workers appear to have increased their hours of work, perhaps because some used transfers to expand their business.” Link popup: yes.
- Continuing the analysis of Hauschofer and Schapiro’s controversial results popup: yes from a cash study transfer in Kenya, Josh Rosenberg at GiveDirectly has, at the end of his overview, some thoughtful questions for continuing research: “Is our cost-effectiveness model using a reasonable framework for estimating recipients’ standard of living over time?… GiveDirectly provides large, one-time transfers whereas many government cash transfers provide smaller ongoing support to poor families. How should we apply new literature on other kinds of cash programs to our estimates of the effects of GiveDirectly?” Link popup: yes.
A pro-union argument from the right: unions’ net fiscal impact
AARON SOJOURNER and JOSE PACAS of the UNIVERSITY OF CHICAGO look at how unions affect net fiscal impact (taxes paid vs. benefits received) of individual workers.
In a blog post popup: yes, Sojourner explains: “The main takeaway is that we have new evidence that unions move families towards a middle-class model of earning sufficient private income, paying taxes, and staying clearer of the public safety net. If family self-sufficiency is an important value to you as a policymaker or a citizen and you are looking for tools to increase it, don’t overlook unions. They help families stay clear of the worst economic outcomes by increasing private income and insurance coverage.”
From the paper:
“Union members appear to pay more every year in federal, state, and local taxes than do similar non-union workers, which is connected to the fact that they earn thousands more dollars in annual private income on average. Furthermore, union members appear to receive less in public benefits on average…. This is the first analysis focusing on or quantifying this effect of unions. Though the prevalence of unionization is declining, this evidence suggests that nearly 15 million American union members are contributing an average of between $540 and $1,300 more annually to the public balance sheet than they would otherwise be. If the U.S. union membership rate stayed at its 1994 level of 17.4 percent, 8.4 million non-union workers in 2015 would have been union members.”
Link popup: yes to the full working paper.
- For more on unions, see Suresh Naidu’s recent talk popup: yes on unions and inequality, and his 2017 paper (with Dan Herbst et al) which used data from Gallup opinion polls and found that “unions have had a significant, equalizing effect on the income distribution over the twentieth century.” Link popup: yes.
Ag tech, big data, and the right-to-repair
The buzzy advent of precision agriculture—tech-augmented farming—has raised a number of interesting questions about data and ownership. A 2017 article from MOTHERBOARD explores the world of black market software for John Deere tractors, illuminating many dimensions of the situation:
“A license agreement John Deere required farmers to sign in October forbids nearly all repair and modification to farming equipment, and prevents farmers from suing for ‘crop loss, lost profits, loss of goodwill, loss of use of equipment… arising from the performance or non-performance of any aspect of the software.’ The agreement applies to anyone who turns the key or otherwise uses a John Deere tractor with embedded software. It means that only John Deere dealerships and ‘authorized’ repair shops can work on newer tractors.
‘If a farmer bought the tractor, he should be able to do whatever he wants with it,’ Kevin Kenney, a farmer and right-to-repair advocate in Nebraska, told me. ‘You want to replace a transmission and you take it to an independent mechanic—he can put in the new transmission but the tractor can’t drive out of the shop. Deere charges 230 USD, plus 130 USD an hour for a technician to drive out and plug a connector into their USB port to authorize the part.’
‘What you’ve got is technicians running around here with cracked Ukrainian John Deere software that they bought off the black market,’ he added.”
A 2016 paper by MICHAEL SYKUTA of the UNIVERSITY OF MISSOURI provides a higher-level overview of the ongoing debates regarding data ownership in agriculture, which span privacy, property, and competition issues:
“In some respects, farmers’ concerns about use of their farm data are no different than general consumer concerns about the security and privacy of data in the cloud: Can other people (and who) see my data? And how are my data being used? While farm production data may not represent the identity theft risk of some consumer data, production data may be used by ag service providers not only to benefit producers by providing managerial decision support, but also to price discriminate by the nature of their recommendations.”
Link popup: yes to the paper.
- A brief history of John Deere’s central role in the early days of precision ag. Link popup: yes.
- Sykuta’s article discusses the development of industry standards for data transparency. Industry groups led by the American Farm Bureau Federation have developed the Ag Data Transparency seal, granted to firms who pledge and comply with several “core principles” related to their data collection and usage practices. The principles can be found here popup: yes.
- A recent Wired article details a new push in the use of satellite imagery to yield data and make conclusions about crops. Link popup: yes. (And link popup: yes to the company website of Granular, whose work is featured heavily in the piece.)
- A paper from last month details the state of the field of big data in agriculture. Link popup: yes.
- An example of an algorithmic audit by Cathy O’Neil, for the company Rentlogic popup: yes: “As part of the audit, O’Neil created a tool she calls an ethical matrix, a worksheet that helps companies think through the consequences—intended and otherwise—of the algorithm’s results. Across the top of the matrix are a half-dozen traits—accuracy, consistency, bias, transparency, fairness and timeliness. The vertical axis lists the stakeholders Rentlogic must consider in its model: building owners, renters, the company, and NYC officials. O’Neil says the matrix creates ‘a conversation around what you might need to worry about.'” Link popup: yes.
- A new cash transfer study, Baby’s First Years, will give $333 a month to new mothers for 40 months. “The experiment is unique in two aspects. One is its exclusive focus on the impacts of income, unrelated to employment. The other is its focus on the first three years of a child’s life.” Link popup: yes.
- At Slate, detailed and positive coverage of three studies on the effects of cash transfers (including health effects) from Canada, the US, and Colombia. Link popup: yes. ht Lauren
- A report from the Friends Provident Foundation in the UK provides an overview of the social wealth fund landscape and offers three models—a Citizen’s Wealth Fund, a Social Investment Wealth Fund, and an Urban Wealth Fund—for implementation. Link popup: yes.
- Last week we shared several articles related to the push for postal banking in the United States. This week, in Bloomberg, Noah Smith issues some cautions based on the case of Japan’s (now privatized) postal bank. Link popup: yes.
- Quantifying the pace of urban life: among other variables, pedestrian walking speed increases with the population of a city. Link popup: yes.
- “Using new county-level estimates of intergenerational economic mobility for children born between 1980 and 1986, we exploit the uneven expansions of Medicaid eligibility across states to isolate the causal effect of this specific policy change on mobility outcomes.” Link popup: yes.
- The CBPP has a new roundup of policies to help reduce inequality, with mention of CUNY ASAP and other effective training programs. Link popup: yes.
- The Verge on Google’s uncannily realistic new robot voice: “If robots can freely pose as humans the scope for mischief is incredible; ranging from scam calls to automated hoaxes.” Link popup: yes. Linked within, another take from Alexis Madrigal: “For decades now, we’ve been forcing human service workers to act like robots. This makes many service interactions unpleasant enough that people want to avoid them, so now, Google will provide everyone with a robot that can act like a human.” Link popup: yes. Zeynep Tufekci responds on Twitter: “This is straight up, deliberate deception. Not okay.” Link popup: yes.
- The latest report from People’s Policy Project makes a compelling argument for extending franchise to the incarcerated. Link popup: yes.
- On competition and public goods provision. Link popup: yes.
- “The rise and fall of empires over the last 5,000 years – from the Afsharid Dynasty to the British Empire – still influences world trade patterns today. New data on the rise and fall of 140 empires across the world over the last 5,000 years reveals that present-day trade flows between countries that were once in a common empire are on average 70% larger than that between unrelated countries.” Link popup: yes.
Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: email@example.com