Direct Income Transfers Research Articles

Effects of Pension Eligibility Expansion on Men’s Cognitive Function: Findings from Rural South Africa

ABSTRACT Two-thirds of people living with Alzheimer’s disease and related dementias (ADRD) live in low- and middle-income countries, and this figure is expected to rise as these populations are rapidly aging. Since evidence demonstrates links between socioeconomic status and slower rates of cognitive decline, protecting older adults’ cognitive function in resource-limited countries that lack the infrastructure to cope with ADRD is crucial to reduce the burden it places on these populations and their health systems. While cash transfers are a promising intervention to promote healthy cognitive aging, factors such as household wealth and level of education often confound the ability to make causal inferences on the impact of cash transfers and cognitive function. This study uses a quasi-experimental design, leveraging an exogenous expansion to the Old Age Pension for men in South Africa, to approximate causal associations with cognitive function. We found evidence that there is a potential benefit of cash transfers at an earlier age for older individuals. As such, transfers such as pensions or other forms of direct basic income transfers may hold promise as potential interventions to promote healthy cognitive aging.

Hidden Subsidies

Many governments use price subsidisation (total costs less total revenues from user charges) to meet social protection objectives in lieu of, or in addition to, direct income transfers. Such subsidies may be perceived as influencing behaviour to further other socially desirable policies. For example, the price response induced by lowering the price of schooling will both lower the cost of living for the beneficiaries and also increase the investment in education more than a similar income transfer would achieve. The incidences of benefits from a general price subsidy are proportional to purchases and can be deduced from the pattern of expenditures. Some goods are inappropriate vehicles for redistribution since subsidies on them will not only accrue mainly to the rich they will actually increase inequality in welfare. It is therefore important to ensure that commodities chosen for price subsidisation are largely consumed by the lower income groups. Also, detailed data on such commodities should be made public to make the extent of subsidy easily tractable.

When the State matters – Government spending and direct income transfer in the Covid-19 pandemic

The monetary flow from direct income transfers, as well as the mass of salaries of public employee, softened the negative economic effects of the Covid-19 pandemic in municipal economies. Based on this premise, we evidenced the coverage and regionality of direct income transfer programs, advocating about the positive effects of social politics of a distributive nature for the most vulnerable part of the Brazilian population.

Conditional Income Transfer Program as a Means to Development in Brazil: An Intersection With Amartya Sen’s Concepts

The paper aims to examine the ability of income transfer programs in promoting development. More specifically, it utilizes the conception of development defended by Amartya Sen, to confirm or not the hypothesis that the Brazilian approach with the structuring of the Bolsa Familia Program serves the purpose of promoting the economic and social development of the country. For this purpose, the methodology used will be deductive, based on bibliographic research and official data. The article begins by analyzing how income distribution policies operate in the expansion of real freedoms and, more specifically the Brazilian reality with the Bolsa Familia Program, a public policy of direct income transfer, aimed at families in situations of poverty and extreme poverty throughout Brazil, which seeks to guarantee these families the right to food and access to education and health. It then exposes Sen’s conception of what is development, which goes beyond narrower views that limits it to GNP growth or industrialization, encompassing this perspective in a broader concept of development as a process of expanding the real freedoms that people enjoy. In the end, the paper makes an intersection of the Bolsa Familia Programs with Sen’s concept of development, presenting as a final result the conclusion that the program proved to be a relevant tool in removing causes of deprivation of freedom and, therefore, is a move in the right direction of the development process.

AUXÍLIO EMERGENCIAL - IMPACTOS NA RENDA E NO ICMS

The literature has shown that public policy programs based on social protection for the most needy, provide a reduction in income inequalities, as long as these policies bring neutrality to fiscal policy, that is, they do not increase the public deficit. The instruments of social protection, especially those of direct income transfer to the most needy, may result in an increase in consumption by the poorest classes, and consequently an improvement in tax revenue, especially in the collection of ICMS, consumption tax . So, we intend to show here that emergency aid, which is a temporary income transfer program implemented by the Federal Government to mitigate the impact of the economic crisis resulting from the COVID-19 pandemic, had direct implications for the economy; especially in improving the income of the most needy and a return, in part of the benefit, to the revenues of the States, in the form of taxation. Said Emergency Aid minimized the drop in collection, or even maintained the collection levels of ICMS, the most important tax of the States, which contributed to the revenue of these federated entities. As a result of the fiscal problems caused, Emergency Aid heated the economy and boosted consumption in order to keep the state ICMS tax collection at even higher levels, in many states, compared to the pre-pandemic period. The objective is to outline an empirical strategy to measure the impact that the emergency aid had on the collection of ICMS, that is, to measure the sensitivity of the variation of the ICMS of the States due to the injection of resources of this transfer program.

AUXÍLIO EMERGENCIAL - IMPACTOS NA RENDA E NO ICMS

The literature has shown that public policy programs based on social protection for the most needy, provide a reduction in income inequalities, as long as these policies bring neutrality to fiscal policy, that is, they do not increase the public deficit. The instruments of social protection, especially those of direct income transfer to the most needy, may result in an increase in consumption by the poorest classes, and consequently an improvement in tax revenue, especially in the collection of ICMS, consumption tax . So, we intend to show here that emergency aid, which is a temporary income transfer program implemented by the Federal Government to mitigate the impact of the economic crisis resulting from the COVID-19 pandemic, had direct implications for the economy; especially in improving the income of the most needy and a return, in part of the benefit, to the revenues of the States, in the form of taxation. Said Emergency Aid minimized the drop in collection, or even maintained the collection levels of ICMS, the most important tax of the States, which contributed to the revenue of these federated entities. As a result of the fiscal problems caused, Emergency Aid heated the economy and boosted consumption in order to keep the state ICMS tax collection at even higher levels, in many states, compared to the pre-pandemic period. The objective is to outline an empirical strategy to measure the impact that the emergency aid had on the collection of ICMS, that is, to measure the sensitivity of the variation of the ICMS of the States due to the injection of resources of this transfer program.

Recent social policies and rural development in Brazil: the Family allowance programme in rural areas.

Brazil won international renown in the first decade of the twenty-first century for reducing social inequalities and hunger, poverty, and extreme poverty. The Bolsa Familia Programme played a significant role in this achievement. This article discusses public policy based on direct income transfer in Brazil and its role in poverty reduction, with special focus on outcomes in rural areas in the southern and north-eastern regions of the country. The article uses a theoretical framework that views development from the perspective of the social actors involved. The methodology of this research is based on data collected from the TABCad software of government departments responsible for the policies, as well as information gathered from fieldwork. The findings corroborate the importance of the Bolsa Familia Programme in achieving advances in Brazil in the study period. They show that the impact of the Programme on rural populations and in the north-eastern region of the country has been notable, and can be attributed to a policy that focuses on social security as well as development.

NUTRITIONAL CONDITION OF CHILDREN WHO BENEFIT FROM THE “BOLSA FAMÍLIA” PROGRAMME IN A CITY OF NORTHWESTERN SÃO PAULO STATE, BRAZIL

Introdution: The direct income transfer programmes such as “BolsaFamília” have the important function of making it possible for aspects of life to receive the necessary care and importance in order to improve the quality of life. One of the aspects concerns food and healthy nutrition. Objective: The objective was to assess the nutritional condition of children under five years old whose families are benefited by the programme”BolsaFamília” in a city of northwestern São Paulo state, Brazil. Methods: A cross-sectional and retrospective study was carried out using the medical records of 284 children under the age of five, from which socio-demographic, weight and height data were collected. In order to diagnose children’s nutritional condition,the indicators weight/age, height/age and weight/height were used, from the cutoffpoint z-score, recommended by the WHO Global Database on Child Growth and Malnutrition. Descriptive statistics and the Chi-square test were used to analyse data, assessing the association of indicators, gender and age. Results: 8.8% of the children have deficits concerning height/age and 4.2% have deficits concerning weight/age; 8.1% and 7.4% are overweight concerning weight/age and weight/height; 4.6 % of the children under 2 years oldhave higher weight than the expected for their age and also for their height, and 7.8% of the children have low height for their age. The prevalence of weight deficit and excess in children observed in this study were similar to those found in other regions of Brazil. Conclusion: The maintenance of the nutritional surveillance system is extremely important in order to detect risk groups and help plan effective measures to prevent and correct nutritional problems.

Food security policies in India and China: implications for national and global food security

Food insecurity is a much more serious concern in India than China. In addition to income and poverty differences, we argue in this paper that differences in food policies can further explain the different food security outcomes across the two countries. First, India mostly uses price-based input subsidies to support agricultural incentives whereas China has recently adopted direct transfers to support agricultural incentives, which are believed to be less distorting and more efficient. Second, the two countries apply quite different approaches to address poor consumers’ access to food, with India adopting a widely criticized public distribution system and China mainly using direct income transfers and other social safety nets. Third, although both committed considerable fiscal resources to insulating their respective domestic markets, especially during recent food price spikes, India’s heavy dependence on price-based measures causes relatively larger and more volatile fiscal burdens, thereby likely making it more vulnerable in dealing with similar events in the future. These findings have important implications for food policy and food security in the two countries in the future.

Islam, Inequality and Pre-Industrial Comparative Development

This study explores the interaction between trade and geography in shaping the Islamic economic doctrine and in turn the comparative development of the Muslim world. We build a model where an unequal distribution of land quality in presence of trade opportunities conferred differential gains from trade across regions, fostering predatory behavior from the poorly endowed ones. We show that in such an environment it was mutually beneficial to institute an economic system of income redistribution featuring direct income transfers in return for safe passage to conduct trade. A commitment problem, however, rendered a merely static redistribution system unsustainable. Islam added a set of dynamic redistributive rules that were self-enforcing under large gains from trade and high proportions of arid land. While such principles fostered the expansion of trade within the Muslim world they limited the accumulation of wealth by the commercial elite, shaping the economic trajectory of Islamic lands in the preindustrial era.

Antipoverty Transfers and Inclusive Growth in Brazil

The paper examines the growth of antipoverty transfers in Brazil and their role in securing inclusive growth. Since the turn of the century, Brazil has managed to combine improvement in its growth performance, by the standards of recent decades, with substantial, and arguably unprecedented, reductions in poverty and inequality. There is considerable interest in the mix of economic and social policies responsible for inclusive growth in Brazil, including from countries in Africa. Since the mid-1990s, the emergence of large scale programmes providing direct income transfers to household facing extreme poverty and vulnerability have provided a focus for poverty reduction strategies in Brazil. They include non-contributory pensions, like Previdencia Social Rural and the Beneficio de Prestacao Continuada, and human development conditional transfer programmes like Bolsa Escola and Bolsa Familia. Antipoverty transfers are credited with a sharp reduction in extreme poverty and with having contributed to a reduction in inequality and social exclusion. Arguably, they have also strengthened political support for pro-poor policies. This paper provides a comprehensive assessment of the role of antipoverty transfers in securing inclusive growth. It examines their design, implementation, outcomes, and sustainability. It also sketches their potential relevance to African countries. There a growing literature covering recent developments in social assistance in Brazil. The paper contributes to the literature it in several respects. First, the huge interest in conditional cash transfers globally has concentrated attention on Bolsa Familia, but the other components of social assistance are important too and are covered in the paper. Second, very little attention has been paid outside Brazil to the rich discussion and debate around the conceptual and normative frameworks supporting the development of social assistance, and social policy more broadly. The paper addresses this gap. Third, research into the effectiveness of social assistance in Brazil has produced a wealth of information on the aggregate impact of each of the component programmes. This paper assesses this literature while paying special attention to the distribution of the outcomes across municipalities in Brazil and the role socio-economic and capacity condition. Fourth, the paper will pay close attention to the sustainability of social assistance in Brazil, especially the budgetary and political sustainability issues. Fifth, the paper discusses the relevance of Brazil’s antipoverty transfers to African countries, including South-South international cooperation.

Transferência de renda e a dinâmica do crescimento econômico: um modelo de simulação

O objetivo do presente artigo foi elaborar um modelo teórico de simulação para verificar efeitos das políticas distributivas de renda sobre a dinâmica do crescimento econômico, de acordo com uma abordagem estruturalista. A simulação tem como referência o modelo de crescimento liderado pelas exportações, do tipo Kaldoriano. Foram traçados cinco cenários contemplando políticas de distribuição de renda, com e sem transferências de renda direta do governo. O cenário que melhor compatibiliza a redistribuição de renda com aumento das taxas de crescimento de longo prazo faz parte do grupo de políticas "sem transferência". No curto prazo, as maiores taxas de crescimento foram obtidas em um cenário do grupo "com transferência de renda". Conclui-se que existe um trade-off entre as políticas de redistribuição, de modo que aquelas que são mais benéficas para o ambiente macroeconômico no curto prazo podem não ser as melhores no longo prazo, e vice-versa.

Leveraging Fuel Subsidy Reform for Transition in Yemen

Yemen is currently undergoing a major political transition, yet many economic challenges—including fuel subsidy reform—remain highly relevant. To inform the transition process with respect to a potential subsidy reform, we use a dynamic computable general equilibrium and microsimulation model for Yemen; we show that overall growth effects of subsidy reduction are positive in general, but poverty can increase or decrease depending on reform design. A promising strategy for a successful reform combines fuel subsidy reduction with direct income transfers to the poorest one-third of households during reform, and productivity-enhancing investment in infrastructure, plus fiscal consolidation. Public investments should be used for integrating economic spaces and restructuring of agricultural, industrial and service value chains in order to create a framework that encourages private-sector-led and job-creating growth.

Public Expenditure on Education and Healthcare in Nigeria: Who Benefits and Why?

People routinely expect their government through public policy to reduce poverty and inequality, and publicspending is one way a policy maker works towards achieving such important task. Education and healthcareprovision have been suggested as key sectors that help every policy maker achieve the above objective. Thestudy evaluated public spending efforts in reducing inequality and poverty at all levels of these two sectors usingthe Benefit Incidence Analysis (BIA) in Nigeria. Findings from the study suggest that primary education andhealthcare were more pro-poor in absolute terms than tertiary education and healthcare. Secondary education andhealthcare reveal mixed results, while the findings suggest location bias in benefits from public spending forboth education and healthcare. The study findings therefore, imply that subsidising government services canhave more positive effect on income distribution if properly done than direct consumption or income transfers.

Políticas compensatórias versus emancipatórias: desafios para implementação de programas de geração de renda às famílias em situação de risco

A partir de uma ampla pesquisa de campo, junto a famílias pertencentes ao Programa de Erradicação do Trabalho Infantil na cidade de Campinas, buscou-se compreender como vivem e a influência do programa em suas vidas. Para tanto, a argumentação movimentou-se em torno de dois eixos analíticos: em primeiro lugar, mostrou que programas de transferência direta de renda às famílias mais pobres que possuem como contrapartida a inserção e permanência da criança e do adolescente na escola conseguem realmente garantir maior e melhor nível de desempenho escolar. Em segundo lugar, mostrou que programas sociais com vieses mais compensatórios do que emancipatórios não propiciam a autonomia das famílias, o que as deixa numa situação crítica de dependência permanente, podendo até afetar suas próximas gerações.

The Impact of Direct Income Transfers of CAP on Greek Olive Farms’ Performance: Using a Non-Monotonic Inefficiency Effects Model

We analyse the impacts of direct income transfers on the technical efficiency of Greek olive farms. We use a production frontier function and a non-monotonic inefficiency effects model, which incorporates the influences of exogenous variables (subsidies, farm characteristics, etc.) on technical efficiency. The model is applied to 1995–2004 FADN data. The results show that direct transfers of the CAP had a negative and monotonic effect on technical efficiency, whereas the degree of specialisation had a non-monotonic effect on technical efficiency.

Consumption, Income Distribution, and State Ownership in the People’s Republic of China

It is income rather than the peculiar saving behavior of Chinese households that constrains consumption in the People’s Republic of China. The low share of consumption in gross domestic product (GDP) is consistent with the reduced share of GDP of wage earnings — a major source of household income. Corporate savings, which accounted for 23% of national income in 2007, contributed most to the significant increase in the gross national saving rate. The surging corporate savings was mainly due to the bias of income distribution toward capital. The profits of state-owned enterprises (SOEs) made with monopolistic power and government support comprises a substantial part of corporate savings. A series of enterprise reforms have made SOEs leaner and bigger, and transformed a handful central SOEs into monopolies in highly profitable industries. Retained profits by SOEs only benefit managers and employees in these firms, not the general public who are their true owners. The empirical analysis indicates that high levels of compensation by SOEs contributed to rising inter-industry income disparity. To boost domestic demand, it is essential that the government address the bias in distribution between SOEs and households. Collecting dividends from SOEs to fund social welfare systems or direct income transfers to low-income families will reduce the gross national saving rate, boost consumption, and more importantly, mitigate social inequality.

Policy relevance of three integrated assessment tools—A comparison with specific reference to agricultural policies

The Common Agricultural Policy (CAP), a system of market support instruments, direct income transfers, and rural development measures, has been put through an ongoing reform process in recent decades. This paper introduces three policy impact assessment tools (SIAT, SEAMLESS-IF, MEA-Scope tool) and analyses how these tools have responded to a number of challenges for integrated assessment modelling as reported in the international literature. Significant progress has been made with regard to modelling linkages whereas other challenges, particularly those related to issues of scale and uncertainty management, require further efforts. It is also analysed which CAP instruments are represented and what kinds of effects can be analysed at different scales. Market instruments and direct payments are comparatively well represented, while the ability to model rural development measures is mostly beyond the scope of these tools. Because each tool has found a different solution for coping with the common challenges of integrated assessment modelling, the choice of one of the tools for a particular application depends strongly on the policy questions being asked. The SIAT provides the big picture via its ability to represent broad changes in policy instruments with EU-wide cross-sector impacts. The most comprehensive analysis of agricultural policy instruments can be obtained with SEAMLESS-IF. The MEA-Scope tool complements the other two approaches with detailed regional profiles.

Social Policies, Personal and Regional Income Inequality in Brazil: An I-0 Analysis of the 'Bolsa Fammlia' Program

The study presents a Leontief-Miyazawa model to study personal and regional income inequality in Brazil. The economy is divided into 31 sectors, in 5 macro regions; households are allocated into 10 income brackets. The study identifies the contribution of different sectors to inequality. The model is used to simulate the capacity of social policies to reduce personal and regional inequality in the country. The analysis is conducted using the pro-poor “Bolsa Familia” program which is a social program that provides direct income transfers to poor (with per capita income between BRL 60,01 and BRL 120,00) and extreme poor households (with per capita income below BRL 60,00). The results show that in the short run, the “Bolsa Familia” program has proven to produce positive results, both at the personal income level and at the regional concentration level, and has surely paid large dividends in electoral terms. Solving inequality problems, however, might need other mid and long run policies which could improve competitiveness of lagging regions.

The Relative Cost of a Universal Basic Income and a Negative Income Tax

The cost of a negative income tax (NIT) designed to mimic the redistributive effects of a universal basic income (UBI) and set at a level sufficient to eliminate official poverty in the US is estimated using income distribution data for 2002. It is estimated that an NIT satisfying these conditions would have required an $826 billion increase in government spending in 2002, compared to a $1.69 trillion increase for an equivalent UBI. Despite this cost difference, the income and substitution effects of a UBI and an equivalent NIT are shown to be the same; and these effects are analyzed. Finally, the cost of providing a basic income guarantee (BIG) by either of these means is compared to the cost of securing the right to work and income security recognized in the Universal Declaration of Human Rights using a program of direct job creation and conventional income transfers.