Social Protection, Entrepreneurship and Labour Market Activation: Evidence for Better Policies: Seminar Day 2
The Canada´s International Development Research Centre(IDRC), the UNDP International Policy Centre for Inclusive Growth (IPC-IG) and the Colombian Think Tank Fedesarrollo organized an international seminar to discuss social protection and its linkages to jobs, entrepreneurship and women’s economic empowerment. The event was held in celebration of the IPC-IG’s 10th year anniversary, at the Ipea Headquarters in Brasilia on 10-11 September, marking theUnited Nations day for South-South Cooperation(September 12th).
Despite the progressive endorsement of social protection, policy debates have emerged concerning the impact of social protection on labour supply and women’s empowerment. Critics argue that social grants generate dependency among beneficiaries, disincentivise formal work and can reinforce traditional gender roles. Therefore the Seminarprovided a space for international experts and policymakers to take stock of recent research findings and lessons learnt while discussing policy recommendationsto address these debates. The results of the seminar are to be synthesized in a report highlighting the findings of the seminar research and debates. Furthermore, a special issue of “Policy in Focus”, to be launched in 2015, will provide insight into the continuation of the exploration of issues raised during the seminar. A summary of Day 1’s sessions can be read here.
Day 2: Thursday September 11th
The second day of the Seminar began with Session 3, dedicated to “Financial inclusion, financial capabilities and Social protection programmes”. Martín Valdivia (GRADE) gave the first presentation, entitled: “Peru – Impact Evaluation of Juntos and financial education innovations”. The study was motivated by the idea of fostering savings and financial literacy among rural Peruvians in order to improve their living conditions. Valdivia noted how rural people feel alienated from the financial system which has led to a fear of borrowing from formal institutions. Consequently, mini soap operas (mini-novelas) have been recognised as an innovative approach to demystify, bridge the cultural divide, and educate people on how to increase savings. The approach has been employed among women participants of the Juntos programme. Beneficiaries are reluctant to save as would exclude them from eligibility for the programme. Discussant Claudia Martinez noted how the impact of such initiatives is still unknown and largely culturally dependent. Even so, mini soap operas may be a more culturally relevant, impactful, and cost-effective intervention when compared to formal workshops.
Chris Boyld then presented “Peru – Impact evaluation of a Savings Promotion Pilot programme for Juntos Beneficiaries” to evaluate the public value of public entities in developing programmes. On-demand projects were found not to cater to the poorest of the poor, therefore this project was developed to target such a group and deliver financial education by using radio soap operas. Comments were provided by Martinez who noted the valuable result of the Pilot Programme increasing savings.
“Chile – Impact Evaluation of Chile Cuenta and Financial Education programme in FOSIS”, presented by Claudia Martinez (Pontificia Universidad Católica de Chile), evaluated the desires of participants when offered new ways of receiving cash transfers. The study also assessed possible implementation problems, noting how taking context into account is essential, as a programme’s design is not necessarily replicable. She noted how focal groups designated secure transfers as a priority. Discussant Claudio Ferraz pointed to the relatively low take-up in terms of opening a bank account among participants receiving a transfer, with 45 per cent of Chilean beneficiaries not wanting to open an account.
In “Mexico –Impact evaluation of Oportunidades and financial inclusion”, Carlos Chiapa (Colegio de Mexico) highlighted how the poor are usually excluded from the financial system, preferring to resort to the informal sector instead. A sizeable portion of poor Mexican households do not have savings accounts despite having access to the financial system and recognising its benefits. Chiapa went on to conclude that further research into the behavioural economics of Mexico is required to facilitate financial inclusion. Martin Valdivia provided commentary stating that automatic transfers into savings accounts have the power to overcome commitment issues.
“Early findings of “Renda Melhor Jovem” and the design of an impact evaluation for financial literacy intervention” by Claudio Ferraz (PUC/RJ), investigated incentivising school completion in the Rio de Janeiro’s state-based programme. The programme focuses not only on generating access to the financial system but also encouraging youngsters to complete school by using CCTs as an incentive. Ferraz noted how dropping out of school is a major problem in Latin America, as well as resorting to criminality following dropping-out. Participants in the programme open a savings account and receive a transfer for every year of high school completed. They lose all the money if they fail a year. High school students from families with less than BRL100 per capita income are eligible for the programme, which has been phased in since 2011. It has been found that eligible children have had challenges opening savings accounts. Even so, the poorest students were the most likely to successfully open a savings account. Ferraz emphasised the promotion of the programme as well as encouraging students to put their substantial savings to good use, as prospective priorities of the programme. As such, discussant, Chris Boyld submitted that financial education should be included in the programme.
The Plenary Debate, “Taking stock: What have we learnt about the entrepreneurship and productive investment impacts of social protection and financial inclusion? Key policy implications” followed, moderated by Carlos Chiapa. Here participants emphasised how access to the formal financial system helps people address risk and economic shocks as wells as generate well-being.
A Working Lunch was then held dedicated to “Local Economy Wide Impact Evaluation Models: how to measure the local multiplier effects of social cash transfers?” by Benjamin Davis (FAO). Davis explored the local multiplier effect of From Protection to Production’s (PtoP) transfers by performing a simulation of transfers using the local economy-wide impact evaluation (LEWIE) methodology. LEWIE incorporates the principal economic activities and nature of expenditure of a community to be assessed.
The impact of transfers is understood to be undermined when a community imports everything from the outside or cannot meet the increased demand generated by transfers. Davis emphasised this point stating “if production supply is inelastic, the impact will be inflationary rather than real”. Therefore one should assess whether the community can respond to the increased demand generated by transfers. Furthermore, nearly all spill-over effects are experienced by non-beneficiary households. Therefore you have to know the productive capacities of a community to determine the potential income multiplier. The largest multiplier effect of PtoP was found to be in Ethiopia.
The effect is determined by how locals spend their money (e.g. Retail versus crop production), the supply response and elasticity, and the openness of the economy. Davis pointed out how the study had the power to dissuade perceptions that the programme was a mere hand-out, instead having the capacity to facilitate economic development. In discussions following the presentation, Dev Nathan submitted that transfers can benefit the rich and also the government, depending on the impact they have on the local economy.
Session 4, titled “Social Protection and income generation strategies” commenced with a presentation on “The impact of linking CCTs to agricultural credit on productive asset accumulation in rural households in Peru” by César del Pozo (Centro Bartolomé de las Casas/CIES). Pozo gave insight into the background of the programme, noting limited information as a challenge to impact evaluation. Sergei Soares provided commentary. Further knowledge of Peruvian CCTs was then provided by Javier Escobal (GRADE) in the “Impact evaluation of Haku Wiñay in Peru”. Margarita Beneke served as discussant.
“The impact of the linkages of Juntos and a productive development programme (Sierra Sur) in Peru” by Urusula Aldana (IEP-CIES), assessed this capacity-building programme and its components which include natural resource management and strengthening local markets. She reviewed the selection process and assessment methodology, finding that there was no impact on gross income, organisational capital or investment. Commentary was provided by Matthew Bird.
Margarita Beneke (FUSADES) then presented on the “Regional FIDA Project: the case of El Salvador”. The aim was to describe and understand mechanisms by which houses that receive CCTs and rural development projects synergise and/or complement each other. The Comunidades Solidarias Rurales programme evaluation included an assessment of the impact on women and was found to increase empowerment, even in non-domestic domains. She concluded by stating that there is substantial room for improvement. César del Pozo served as discussant.
An “Impact evaluation of a graduation Project in Colombia” was presented by Matthew Bird (Universidad del Pacífico) concerning welfare perception. The study saw shifts in how people would use their money, as exposed in a series of hypothetical questions. However no changes in attitudes or mentalities were found, even with the vast majority of beneficiaries being women. Javier Escobal provided commentary stating how coaching throughout the duration of the project may be useful in changing mentalities, despite being costly to implement.
A Plenary Debate entitled “Taking stock: What have we learnt about articulating social protection and productive development programs? Key policy implications” followed, moderated by Jorge Maldonado.
The Seminar was brought to a close with input from Carolina Robino (IDRC) who mentioned the essential role of social protection in alleviating poverty, while Fabio Veras (IPC-IG) recognised how social protection affords visibility by the government to previously invisible individuals.
A Closing Cocktail celebrating the 10th year anniversary of the IPC-IG brought the Seminar to a close.The IPC-IG has established itself over the past 10 years as a global forum for South-South dialogue on innovative development policies guided by a partnership agreement between the United Nations Development Programme (UNDP) and the Government of Brazil, represented by the SAE/PR.
All materials and outputs from the Seminar are available through the Seminar’s website under the resources section.
For a summary of Day 1’s sessions, click here here.
For a summary of Day 2’s Policy Forum, click here
Author: Ashleigh Kate Slingsby (IPC-IG)
Short URL: http://pressroom.ipc-undp.org/?p=16599