We experimentally test the relative effect of two methods to induce the timely renewal of identification cards in Panamá: reminders and digitization of the renewal process. Simply sending reminders increased the probability of on-time renewals by 12 percentage points while also allowing individuals to renew their ID remotely only increased renewals by 8 percentage points, relative to a control group. We provide suggestive evidence that a poor user experience with the online platform deterred individuals from renewing their IDs at all and partially offset the positive effects of reminders. Despite these nuances, the intervention translated into higher access to government benefits delivered through digital vouchers linked to IDs. This result was driven by lower-income individuals. The results suggest that policies to increase the availability of valid identity documentation can affect access and targeting of social benefits.

Canonical human capital theories posit that education, by enhancing worker skills, reduces the likelihood that a worker will be laid-off during times of economic change. Yet, this has not been demonstrated causally. We link administrative education records from 1987 through 2002 to nationally representative surveys conducted before and after COVID-19 onset in Barbados to explore the causal impact of improved education on job loss during this period. Using a regression discontinuity (RD) design,  Beuermann and Jackson (2020) show that females (but not males) who score just above the admission threshold for more selective schools in Barbados attain more years of education than those that scored just below (essentially holding initial ability fixed). Here, in follow-up data, we show that these same females (but not males) are much less likely to have lost a job after the onset of COVID-19. We show that these effects are not driven by sectoral changes, or changes in labor supply. Because employers observe incumbent worker productivity, these patterns are inconsistent with pure education signalling, and suggest that education enhances worker skill.

Firms in developing countries are embedded in supply chains and labor networks. These linkages may propagate or attenuate shocks. Using panel data from Thai villages, we document three facts: as households facing idiosyncratic shocks adjust their production, these shocks propagate to other households on both the production and consumption sides; propagation is greater via labor than supply chain links; and shocks in denser networks and to more central households propagate more, while access to formal or informal insurance reduces propagation. Social benefits from expanding safety nets may be higher than private benefits.

Locally targeted programs may exploit available information transmitted through local networks to improve the selection of beneficiaries, but the effective use of this information is not granted when the selection of beneficiaries entails balancing multiple targeting criteria that are costly to verify. This paper analyzes how local committees balance issues of neediness, productivity, risk, and favoritism to allocate subsidized loans to Thai villagers. Local committees in charge of managing village funds provided credit to richer, less-productive and elite-connected villagers threatening the program’s sustainability. Informal markets partially attenuated the targeting distortions by redirecting credit from connected to unconnected households, albeit at high interest rates. Counterfactual exercises show that eliminating the connection-based distortions would reduce within-village inequality by 9.7% and modestly increase village-level output by 0.9 to 1.5%. 

Exploiting the context of a large-scale, untargeted, non-contributory pension program in Bolivia, we study the short-term effects of cash transfers on household resilience during the onset of the COVID-19 pandemic. We compare households that became eligible during the early stages of the pandemic to marginally ineligible households using a regression discontinuity design. We utilize a novel dataset collecting information in near-real time to unravel a 25% increase in the probability that households have enough food to cover a week of necessities, and a 50% decline in the probability of going hungry due to lack of food during the first month of the pandemic. We find that the program acts as insurance for households that lost their livelihood during the pandemic. This insurance feature explains 60% of the reduction in the probability of going hungry. The results suggest that pre-existing untargeted cash transfer programs in developing countries could be effective both at assisting poor households in meeting their consumption needs and at providing insurance in case of labor market shocks to non-poor households.

Decreases in labor supply among cash-transfer recipients are often cited as potential drawbacks of social-assistance programs. However, cash transfers can also increase employment. Using variation across cohorts and over time in the eligibility criteria of a nationwide conditional cash-transfer program in Bolivian public schools, this paper shows that employment increases among parents of eligible children, particularly for females. The increase in employment coincides with increases in self-employment and in the probability of investing in family businesses. These effects are mostly driven by females from areas with limited access to financial services. As mothers work more, overworked fathers reduce work hours. The results suggest that there are (positive) unintended consequences of cash-transfer programs targeting households with school-age children: Cash transfers may relax liquidity constraints and boost entrepreneurship, and also relieve overworked adults.

The current coronavirus pandemic is an unprecedented public health challenge that has devastating economic impacts for households. Using online surveys in 17 countries in Latin America and the Caribbean, we show that the economic impacts are large and unequal. In a sample of 230,540, 45% of respondents report that a household member lost a job, and among households owning small businesses, 59% of respondents report that a household member closed their business. Among households with lowest income prior to the pandemic, 71% report that a household member lost their job and 61% report that a household member closed their business. Declines in food security and healthiness are among the disproportionate impacts. Our results provide evidence that the current public health crisis will exacerbate economic inequality.

We study the effects of a Bolivian law that introduced benefits and protections for child workers (who are overwhelmingly informal workers) and lowered the de facto legal working age from 14 to 10. We employ a difference-in-discontinuity approach that exploits the variation in the law's application to different age groups.  Work decreased for children under 14, whose work was newly legalized and regulated under the law, particularly in areas with a higher threat of inspections.  The effects appear to be driven by a reduction in the most visible forms of child work, suggesting that firms may have reduced employment of young children to minimize the risk of being inspected.  In contrast, we find that more formal channels of adjustments - such as increased costs of hiring due to the costs of complying with the new law - are unlikely to explain the overall decline in the work of young children.

We exploit an expansion in social protection to middle-income households to study how they cope with economic shocks and how to build their resilience. We use a regression discontinuity design around the eligibility cutoff for a program that delivered monthly cash transfers mainly through bank accounts in Colombia. We find no impacts on food security, education, and health outcomes—--the target outcomes of antipoverty programs. In contrast, program eligibility increases non-food consumption and reduces debt for routine expenses. Bank account ownership increases by 16%, and beneficiaries are more likely to borrow from formal lenders. Amid systemic and idiosyncratic shocks, the program prevents middle-income households from reducing non-food spending and acquiring expensive debt. When hit by severe shocks, beneficiary households substitute away from predatory loans. The results suggest that middle-income households are constrained by lack of insurance and that social protection can help them build resilience through formal credit markets.

The push for adopting digital modes of payment rests on three promises: increased efficiency of transactions, increased financial inclusion, and improvements in the financial well-being of low-income individuals. We experimentally test the extent to which these promises are fulfilled. We exploit the random assignment into an intervention to encourage direct deposits of recurrent government benefits into digital bank accounts in Colombia. Switching from cash to direct deposits reduces disbursement errors and increases access to benefits among eligible beneficiaries.  It also increases the ownership of bank accounts, the demand for formal loans, and loan take-up among individuals without a financial history. However, we do not find evidence of improvements in financial well-being across any of our metrics.

A key challenge for policymakers in low- and middle-income countries is to design a method to select beneficiaries of social programs when income is unobservable and volatile. We use a unique panel dataset of a random sample of households in Colombia’s social registry that contains information before, during, and after the 2020 economic crisis to evaluate a traditional static proxy-means test (PMT) and three policy-relevant alternatives. We consider targeting metrics and social welfare under different curvatures of governments' social welfare function, aggregate economic environments, and budgetary and political constraints. Updating the PMT data does not improve social welfare relative to the static PMT. Relaxing the eligibility threshold reduces the exclusion error, increases the inclusion error, and increases social welfare. A dynamic method that uses data on shocks to estimate a variable component of income reduces exclusion errors and limits the expansion in coverage, increasing social welfare during the economic crisis.