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Power of partnership conference: Presentation: Labour markets in village economies

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Power of partnership conference: Presentation: Labour markets in village economies: Can one time asset transfers reduce poverty? Evidence from Bangladesh

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Power of partnership conference: Presentation: Labour markets in village economies

  1. 1. Can one time asset transfers reduce poverty? Evidence from Bangladesh Paper Title: Labor markets in Village Economies Oriana Bandiera, Robin Burgess, Narayan Das, Salim Gulesci, Imran Rasul, Munshi Sulaiman Pallavi Prabhakar
  2. 2. Ultra-Poor Wealthier class Poverty Trap ✔ Poverty Trap ✖ 40 years of age Has a 6 years old child Works as a domestic maid Rama Kavita Often engages in casual agricultural wage labor Owns a goat ($54) Primary earner of the family Is illiterate Earns low income Is below poverty line Unlikely to migrate Works 991 hrs/year Has little or no savings Doesn’t own land/ other assets 40 years of age Has a 6 years old child Owns 3 cows ($542) Primary earner of the family Above poverty line Owns a house Works 502 hours per year Owns the land/ has a mobile phone Engages in livestock activity Is literate Earns better returns for livestock Earns a higher income Has savings, spends more
  3. 3. Can Rama come out of poverty trap if she also engages in livestock activities like Kavita? What are the ways to make Rama better off? Productive assets Can only do casual jobs Low pay, low demand Better income Low savings Can’t afford assets No productive assets Low income Can do livestock rearing High returns to livestock Improved savings Investment in assets Targeting the Ultra Poor BRAC Asset transfer Skills + Capital Subsistenceallowance Training Creditsupport Poverty Trap ✔ Poverty Trap ✖
  4. 4. Research design + methods •Randomized roll out across 21,000 households in 1,309 villages covering 40 BRAC branches •4 rounds of survey in 2007, 2009, 2011, 2014 covering 6,700 ultra poor households •Participatory wealth ranking exercise used before baseline randomization for ranking households as ultra poor, near poor, middle class, upper class •Difference-in-difference specification used to identify the impact of the Targeting the Ultra Poor (TUP) program on individual and household level outcomes
  5. 5. Impact 0 20 40 60 80 100 120 140 2007-09 2007-11 2007-14 Yearly changes in expenditure on durables after 2, 4 and 7 years (USD) Treatment Control 0 500 1000 1500 2000 2007-09 2007-11 2007-14 Yearly changes in productive assets after 2, 4 and 7 years (USD) Treatment Control -0.1 0 0.1 0.2 0.3 0.4 2007-09 2007-11 2007-14 Yearly changes in share with access to land after 2, 4 and 7 years Treatment Control
  6. 6. Talking numbers 217% more hours to livestock rearing 11% increase in per capita consumption expenditure 21% higher earnings compared to control group 17% fewer hours to agriculture labor 26% fewer hours to maid services 54% increase in value of household durables 82% increase in value of landholdings Value of assets owned is 159% larger than control Agriculture and maid wages are 9% and 11% higher respectively 22% Internal rate of return Average benefit cost ratio of 3.2 for TUP
  7. 7. What do other studies say?
  8. 8. References: Bandiera, O., Burgess, R., Das, N., Gulesci, S., Rasul, I. and Sulaiman, M., 2017. Labor markets and poverty in village economies. The Quarterly Journal of Economics, 132(2), pp.811-870 A short video

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