olena nizalova ppt

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Social Assistance System Modernizationand Participation of the Poor

Hanna Vakhitova, Olena Nizalova, Denys NizalovKyiv School of Economics

GDN conferenceJune 2013, Manila

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Motivation: Post-communist countries and poverty

1989, Communist regimes in Europe 9% of the World population 14% of the World land area

Poverty (less than $4 a day) 1989: 14 million people (out of 360) 1998: > 140 million people.

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Motivation: Importance of welfare system

“The last public policy instrument to prevent extreme poverty” (Cerami, 2009)

Ukraine: 19% of all families; 13000 employees Low effectiveness of poverty reduction programs

in transition countries (Verme, 2008, Moldova; Van de Walle, 2004, Vietnam; Milanovic, 2000, Latvia) Amount of assistance (too high, too low) Poor take-up (best performers - 36%) Lack of capacity (Lokshin and Ravallion, 2000, Russia)

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Our question

Impact of the welfare system re-engineering on three outcomes:

Share of applicants among the poor; Share of recipients among the poor; Share of recipients among the poor who

receive multiple types of assistance.

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Our contribution

Focus on the poor-oriented system intervention

Look at particular activities Include large set of controls Account for non-randomness of Project

implementation

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Literature

Academic literature: poverty spell (Okrasa, 1999a, 1999b, Poland) probability of exit from poverty (Okrasa, 1999a, 1999b,

Poland; Ravallion et al., 1995, Hungary; Van de Walle, 2004, Vietnam)

protecting from poverty (Van de Walle, 2004, Vietnam; Lokshin and Ravallion, 2000, Russian crisis)

Policy papers (WB, 2005, 2009): Poor targeting, complicated application procedure, poor

employee motivation, inadequate service quality, clients’ dissatisfaction – factors that prevent take-up.

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2.5 mln families by the end of 2009 (19%) Total annual expenditures = 17 bln UAH (310 mln USD) -

6.3% of the State Budget MLSP, 27 regional and 754 local departments, 13,000

employees 15 national and a number of local social assistance

programs 6 major programs cover 97% of recipients

Brief description of the system

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Modernization of the System

System re-engineering started in 2005:program based ►process based Functional divisions (separation of the application admission, case

processing, and money transfer procedures) Single Window/ ”one-stop shop” Other administrative changes (appointments by phone, control over

transfer of cases , archive) Renovation of offices

Modernization and improvement of the analytical capacity of the local and regional departments Computerization Employee training Unified software Unified data-base

Information campaign

9Project Impact on Household/ Population Behavior 9

Increase in productivity of employees

Population awareness about various types of

assistance

Population attitude towards system of social assistance

Number of processed applications

Activity: Information campaign

Poverty reduction

Number of applications

Activity:New computer

equipment

Activity: Facilities

renovation

Activity: Single application

Social assistance system targeting

Application timeOpportunity to submit single application for

several types of assistance

Psychological discomfort during the application

process

Readiness of applicants for application process

Number of mistakes in the assistance

assignment

Program Impact Model

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Project activities implementation

Treatment indicatorsYear

Difference2008 2009

Renovation of premises and office equipment A

0.0 0.287 0.287***

Computer hardware was purchased during the last year B

0.111 0.006 -0.095***

Single application procedure B 0.761 0.851 0.09***

Informational campaign A 0.0 0.544 0.544***

Data: A – Administrative data; B – Employees Survey.

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Poverty-related outcomes

Project outcomes Year Among

non-poorAmong

poorOverall in the

population

Applied for social assistance

2008 19.4% 30.6% 23.6%

2009 18.0% 33.3% 23.4%

Both years 18.7% 31.9% 23.5%

Receive any social assistance

2008 18.6% 29.3% 22.5%

2009 17.0% 28.8% 21.1%

Both years 17.8% 29.1% 21.8%

Receive multipleassistance

2008 6.0% 9.8% 7.4%

2009 4.6% 9.9% 6.5%

Both years 5.3% 9.8% 7.0%

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Methodology

Y – Project outcome (application or participation);Z – Project activities vector; P – Poverty indicatorХ – Household controls; V – selection factors (district and office characteristics )Т – timei – individual j – district

District-level clustering

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Surveys: (Wave 1 - Fall 2008; Wave 2 - Fall 2009) Households Employees

Administrative data of MOL Program implementation log (2005-2009) Census of Social Assistance Departments (2005-2009)

General Statistics by State Statistics Committee

Data

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Results

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Basic specifications

Applied for social

assistance

Receive any social

assistance

Receive multiple

assistance

Renovation of premises and office equipment 0.046 0.058 -0.008

Modernization of computer networks -0.201*** -0.189*** -0.056*

Single application procedure 0.016 0.035 -0.01

Informational campaign 0.008 0.011 0.031

Poor * Renovation -0.026 -0.002 0.005

Poor * Computer 0.391*** 0.411*** 0.197**Poor * Single application 0.057 0.037 0.013

Poor * Informational campaign 0.044 0.033 -0.004

Poor 0.053 0.048 0.027

Pseudo R2 0.032 0.03 0.023

Observations 2,142 2,142 2,142

Probit marginal effect reported. *** p<0.01, ** p<0.05, * p<0.1.

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Adding controls: household

Applied for social

assistance

Receive any social

assistance

Receive multiple

assistance

Renovation of premises and office equipment 0.065 0.076 0.002

Modernization of computer networks -0.204*** -0.189*** -0.036*

Single application procedure 0.016 0.035 -0.008

Informational campaign -0.007 -0.003 0.027

Poor * Renovation -0.045 -0.019 -0.013

Poor * Computer 0.507*** 0.529*** 0.249***Poor * Single application 0.062 0.042 0.005


Poor -0.023 -0.026 -0.001

Pseudo R2 0.102 0.102 0.205

Observations 0.102 0.102 0.205


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Adding controls: districts

Applied for social

assistance

Receive any social

assistance

Receive multiple

assistance

Renovation of premises and office equipment 0.250** 0.278*** 0.012

Modernization of computer networks -0.198* -0.193** -0.082

Single application procedure 0.09 0.119** 0.07

Informational campaign 0.089 0.078 0.014

Poor * Renovation 0.006 0.024 -0.017

Poor * Computer 0.353*** 0.378*** 0.309**Poor * Single application 0.114** 0.118** 0.039

Poor * Informational campaign 0.022 0.01 0.009

Poor 0.054 0.026 0.03

Pseudo R2 0.118 0.119 0.126Observations 2,013 2,008 1,385


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Adding controls: household + district

Applied for social

assistance

Receive any social

assistance

Receive multiple

assistance

Renovation of premises and office equipment 0.248** 0.283*** 0.02

Modernization of computer networks -0.190* -0.181** -0.035

Single application procedure 0.084 0.117** 0.034

Informational campaign 0.054 0.045 0

Poor * Renovation -0.004 0.019 -0.023

Poor * Computer 0.501*** 0.537*** 0.279***Poor * Single application 0.122** 0.123** 0.009


Poor -0.051 -0.071* 0.007



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Final specification (with household, district and office controls)

Applied for social

assistance

Receive any social

assistance

Receive multiple

assistance

Renovation of premises and office equipment 0.262** 0.314** -0.028

Modernization of computer networks -0.208 -0.193* -0.01

Single application procedure 0.104* 0.146** 0.041*

Informational campaign 0.05 0.055 -0.031

Poor * Renovation -0.045 -0.022 -0.023*

Poor * Computer 0.430*** 0.470*** 0.205**

Poor * Single application 0.151** 0.147*** 0.014

Poor * Informational campaign -0.03 -0.047 -0.020*

Poor -0.043 -0.064 0.013



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Social Assistance System re-engineering does improve targeting of the system towards poor and simplifies the application process:

Renovation of premises and purchase of new office equipment increases both the application rate and the participation rate of the population in the system.

Conclusions

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Single Window Application Procedure increases the participation rate of both non-poor and poor, with the latter effect being twice larger.

Single Window Application Procedure also encourages application among the poor, without increasing the system load among non-target group.

Conclusions

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Purchase of Computers and Modernization of Computer Networks discourages the application and participation in the system among the non-poor, while having the opposite, and quite large in magnitude, effect on the poor.

Informational campaign has no significant impact on any of the studied outcomes.

Conclusions

olena nizalova ppt

Technology

van de walle

welfare system

assistance

poverty

types

poor

lokshin

recipients