In Iran, cash transfers don't reduce labor supply
A new study examines the effects of Iran's changeover from energy subsidies to cash transfers. From the abstract, by DJAVAD SALEHI-ISFAHANI and MOHAMMED H. MOSTAFAVI-DEHZOOEI of the ECONOMIC RESEARCH FORUM:
“This paper examines the impact of a national cash transfer program on labor supply in Iran. [...] We find no evidence that cash transfers reduced labor supply, in terms of hours worked or labor force participation. To the contrary, we find positive effects on the labor supply of women and self-employed men.”
- Another paper co-authored by Salehi-Isfahani further details the energy subsidies program and the role that cash transfers played in the reforms, with a specific focus on differences in take-up. Link.
- We’ve previously shared work from Damon Jones and Ioana Marinescu on the Alaska Permanent Fund dividend, which found that “a universal and permanent cash transfer does not significantly decrease aggregate employment.” Link.
- In other Basic Income news, petitions and protests are being organized in response to the cancellation of the Ontario pilot.
A 2007 study offers a lesser-known lineage of governmental aid programs
Active Initiative: Guaranteed Income
A recent Upshot column in the NEW YORK TIMES by EMILY BADGER highlights the work of SUZANNE METTLER, who studies Americans' seemingly paradoxical opinions about aid and the federal government:
"Americans are far less likely today than 40 years ago to say in surveys that they trust the government to do what is right or to look out for people like them. At the same time, the share of Americans using nearly all of these other programs has risen."
Mettler's new book, The Government-Citizen Disconnect, deals with the contradiction of widespread reliance on public programs of all kinds while public trust and support for such programs is perilously low. In a paper from 2007, co-authored with ANDREW MILSTEIN, Mettler provides a history of federal aid programs and tracks their relationship to ordinary individuals' lives, exploring how a citizen's relationship to the government shapes their civic identity and political preferences. From the paper:
"Studies routinely illuminate how policies influence the political roles of elites and organized groups, but barely touch on how the state shapes the experiences and responses of ordinary individuals. As a result, we know little about how governance has influenced citizenship over time or how those changes have, in turn, affected politics.
As a first step in addressing this void, we have amassed data that begin to measure the timing and extent of U.S. federal government’s presence in citizens’ lives historically. We present these data in this research note in an effort to help facilitate a bridge between scholarship on American political development and the study of mass political behavior. Although the government-citizen relationship can be studied through other lenses, including the qualifications for legal citizenship, civil rights, or voting rights, or the terms of conscription for military service, we choose to focus on the coverage and benefit rates of major programs through which government offers financial assistance, goods, and/or services or otherwise directly affects their standard of living. In addition to such obvious choices as social insurance and public assistance programs, we consider a wide array of programs including agricultural subsidies, veterans’ educational benefits, and tax deductions for home mortgage interest.
Government programs might influence citizens’ attitudes about government, and fluxuation in programs could help explain changes in such views over time. Citizens’ experiences as beneficiaries might affect their trust and confidence in government, their perceptions of their own political efficacy, and the extent to which government is responsive to people like them.”
- In her own op-ed in the Times, Mettler examines public imagination around welfare, finding that perception of welfare is correlated with perception of the government at large: "One factor, however, did consistently shape Americans' views about government: their perception of 'welfare.' Those who had highly unfavorable opinions of welfare, regardless of how many social benefits they themselves had received, held much more negative views about government. People seemed to view welfare as a microcosm of government: If they perceived it as a 'handout' for the undeserving, or felt that they were unfairly denied benefits because they earned too much, they held government in low esteem. Conservatives capitalize on the willingness of many Americans to blame 'welfare' recipients, while ignoring the pillaging of the public sector by the affluent through tax cuts and tax code benefits." Link.
- There is a substantial social science literature on perceptions of welfare that explores the racialized nature of public opinion regarding various assistance programs. This 2006 paper by Nicholas Winter looks at racial perceptions of Social Security versus "welfare," and this 2014 paper by Martin Gilens finds that "racial attitudes are the single most important influence on whites' welfare views."
- “Questions of dessert are necessarily moral questions—‘what do we owe each other’ is simply another way of framing the fundamental question of justice.” Link.
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- An enlightening review paper from Sam Corbett-Davies and Sharad Goel covers the recent literature on fairness in machine learning: "We show that all three popular definitions of algorithmic fairness—anti-classification, classification parity, and calibration—suffer from deep statistical limitations." Link.
- On some failed monetary technologies, from the excellent Moneyness blog. Link.
- From Adam Tooze, America's Political Economy: Inequality in 2D and 3D: "Did inequality really surge in the US from the 1970s? Did earnings for the majority really flatline from the bicentennial?" Link.
- Trevon D. Logan with a new paper co-authored by Lisa Cook and John Parman that looks at the relationship between rural segregation and lynching in the south. Using the "next door neighbor segregation measure," they find "racially segregated counties were much more likely to experience lynchings." Link.
- Martin Ravallion's new working paper with the Center for Global Development wades into the RCT debates, asking "Should the Randomistas (Continue to) Rule?" Link.
- New work from the Urban Institute and AEI provides detailed analysis of the trends and processes of defaulting on student loans, and advocates for simple and clear default processes that would lower the default rate. Link to a summary blog post, link to the Urban Institute report, link to the AEI report.
- Did austerity cause Brexit? Link.
- A new paper from the Human Capital and Economic Opportunity working group provides a comprehensive overview of research on discrimination in mortgage underwriting, covering disparate impact legal cases, the Supreme Court's "Inclusive Communities" decision, CFPB regulations, and recent developments in FinTech. Link. ht Will
- A new paper by Rebecca Goldstein, Michael Sances, and Hye Young You finds that local police departments that collect greater shares of their revenue from fee and fines solve violent and property crimes at significantly lower rates. Link. (For more on fee and fine farming and criminal justice debt, see this newsletter from March.)
- A short but insightful thread from economist Scott Cunningham on descriptive research: "Descriptive work is really more of a public good. How often did I hear people say that Piketty's book was valuable if only for the documenting of wealth inequality? Why? Because descriptive work creates research agendas. In that sense, description can function like theory." Link.