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Principal Investigator

Ismat Ara Begum, PhD Department of Agricultural Economics

BAU, Mymensingh-2202

Interim Report Prepared for Presentation at NFPCSP-FAO Workshop

28-29 November, 2012; Dhaka

Social Safety Nets and Productive Outcomes: Evidence and Implications for Bangladesh

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Research Team

Prof. Dr. Shaheen AkterCo-Investigator

Prof. Noor Md. Rahmatullah Co-Investigator

Dr. Mohammad Jahangir AlamCo-Investigator

Dr. M. Sayeedul HaqueResearch Assistant

Md. Mojammel Haque Research Assistant

Ferdoushi BegumResearch Assistant

Social safety net programs (SSNPs) are non-contributory transfer programs designed & implemented for the poor & the vulnerable groups

These groups are always a concern to the Bangladesh govt.

One of the main agenda of govt. is reduction of poverty.

Like many other developing countries, SSNPs can play a vital role to reduce poverty in Bangladesh.

Safety net spending is around 15% of the Bangladesh govt. expenditure & 24.57 % HHs received benefit from SSNPs (in 2010)

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Introduction

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31.5 % of households in the country live in poverty

So, it remains unclear whether SSNPs only prevent entry into poverty or promoting exit from poverty or both

Studies investigated ONLY targeting, delivery mechanism, operational performance, alternative design etc.

However, evidence about the productive outcome impacts at household and community levels is scarce

This research will contribute to understand –

Whether selected SSNPs are generating productive outcomes & are contributing to households’ exit from poverty and food insecurity

What constraints or enabling factors are mediating these outcomes

To document potential productive impacts of selected public safety nets at the household and community levels and the possible incentive framework behind those results at the two levels

To identify successful examples of government and NGO safety net interventions which foster productive outcomes

To draw implications for the design and implementation of SSN in Bangladesh and for complementarities among government agencies interventions

Objectives

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GoalFood Security

Poverty reductionCredit accessibility

Risk coping Preventing school drop-out

Community Level

•Goods and labour markets

•Multiplier effects in local economy

•Creation of community level assets/ infrastructure

•Gender inequalities

Household Level•Labor allocation (farm vs off farm, adults vs children)•Asset accumulation/protection•Change in use of inputs and techniques in crop production•Consumption/food security•Human capital accumulation•Investments•Risk coping strategies

Impact

Mechanism

Pathways

Income effectProductivity effectPurchasing power effect

Alleviation of liquidity constraints

Certainty & predictability of income

Promoting child education Optimal intrahousehold

resource allocation

Poor and Vulnerable People

Interventi

on

Social Safety net Programs Cash/Kind /Training

Conceptual Framework

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Hypothesis (Household level)

Hypothesis:SSN interventions either cash or kind (conditional, unconditional, public works) may facilitate significant changes in income generating activities, labour allocation, accumulation of productive assets and productive investments of beneficiary household than non-beneficiary households.

Research QuestionsWhat are the productive outcomes of selected public safety nets at the household level?

MethodologyFor estimating impact we used propensity score matching (PSM) We used HIES 2010 as a single cross section for identifying the treatment & control groups

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Hypothesis (Local Economy Level)The community will benefit economically from social safety nets interventions through local goods & labour markets and multiplier effects

Research QuestionsWhat are the productive outcomes of selected public safety nets at the community level?

Local goods (buying-selling activities, prices etc.)Labour markets (new employment, employment diversification,

wages etc.)Multiplier effects (investment, employment, economic growth)

MethodologyHIES community dataset, FGD (30) and KII(20)

The study is designed to conduct into three phases

Phase 1 → Reviewing Literature, assess the productive impacts of selected SSNs at household level in Bangladesh (literature review and HIES data)

Phase 2 → presents the impact at community level and recent evidence and documents on the productive outcomes of the safety nets in Bangladesh & other countries (Field survey, HIES data & literature review)

Phase 3 → Deals with the issues of enhancing the productive outcomes of the SSNPs (Impact results, SSN-IMPACT matrix, FGDs & KIIs)

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Study Phasing

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For estimating productive outcomes we considered -

Interventions with an explicit income-generation component Old age allowance Allowances for the widowed, destitute and deserted women Agriculture rehabilitation A combination of -

Cash for work, VGD, food for work & 100 days scheme

Interventions with no explicit income-generation component

Stipend for primary students Stipend for secondary and higher secondary/female students

Phase 1: Literature review, estimating productive outcomes at household level

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Table 1 : Number of beneficiary households of the selected SSNPs in HIES 2010

No. Selected SSNPs Programs beneficiary HHs

% of beneficiary households

1 Old Age Allowance (OAA) 485 27.02 Allowance for the Widowed, Deserted

and Destitute (AWDD) 203 11.33 Combined program (CFW, VGD, FFW,

EGP 100 days) 41 2.34 Agriculture Rehabilitation 446 24.95 Stipend for Primary Students 444 24.76 Stipend for Secondary & Higher

Secondary/ Female Student 176 9.8 Total 1795 100

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Table 2: Measurable productive outcome indicators at household levelOutcomes Indicator Measurable

indicatorImputed from 2010 HIES

Labour allocation

Relative ( farm , non-farm, male, female, self) employment

Average working hours per day per worker

Calculating daily male and female hours in farm , non-farm activities

Income generating activities

Total no. of activities involved, Total (farm, non-farm)income,

Number of total activities per household per active member

Calculate total number of activities, Calculating total income (farm, non-farm)

Investments Own land per person, Real expenditure on tools, animals, family enterprises, durable goods & housing improvement per household

per person/ household

Calculate own land , hhs expenditure

Shock and coping mechanism

Asset sold ,Insurance, migration, school drop-out

Dummy variable: 1 and 0

Shock and coping mechanism

Consumption Per capita Calculating Sum of per capita value of food and non-food expenditure.

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Table 3 : Observable characteristics included as independent variables in the PSMVariables Description Mean SDDependent variable Treatment=1 0.32 0.47AgeH Age of household head (years) 46.14 14.26AgeH2 Age of household head (years) square 2332.25 1453.23EduH Education of household head (years of schooling 2.78 3.96EduHD Household head is illiterate=1 0.62 0.49Land Owned land (decimal) 35.87 92.66 FamS Total household size 4.48 1.83Chl514 Children 5-14 years 52.03 19.28Male65 Male 65+ year old=1 1.12 1.08Female62 Female 62+ year old=1 0.15 0.36Disable Member disable=1 0.12 0.33DayL At least a member work as day labor=1 0.03 0.18mstatF Women currently separated, divorced etc. =1 1.31 0.80Elect Electricity connection=1 0.24 0.43Room Room per person in household 0.48 0.50Region 1 Regional dummy 0.52 0.32R2 Regional dummy 0.22 0.42R3 Regional dummy 0.05 0.21R4 Regional dummy 0.08 0.27Sample Size (n)=5635 including treatment group (T=1795)

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Conditional Independence Assumption

Overall tests Probit Pseudo R2 LR χ2 p> χ2 Mean Bias Median BiasOAARaw sample 0.244 740.25 0 45.1 30.3Matched 0.012 16.24 0.507 3.4 2.9AWDD Raw 0.243 391.46 0 40.6 31Matched 0.009 4.82 0.988 3 1.9AR Raw 0.137 393.50 0.000 19.4 17.5Matched 0.019 23.96 0.156 3.8 3.5PEdu Raw 0.163 464.81 0.000 22.8 14.5Matched 0.005 6.34 0.999 2.2 2.1Second Edu Raw 0.177 256.42 0.000 30.8 34.4Matched 0.015 7.36 0.987 3.8 2.8All SSNPRaw 0.087 613.39 0.000 18.4 20.4Matched 0.003 17.39 0.563 3.4 3.1

Table 4: Average bias and test statistics, PSM Analysis

0 .2 .4 .6 .8Propensity Score

Untreated Treated

Figure 1 : Common supports (Stipend for Primary Education Program)

0 .2 .4 .6 .8 1Propensity Score

Untreated Treated

Figure 2 : Common supports (Agriculture Rehabilitation Program)

Common Support or overlap region

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Table 5 : Impact of Old Age Allowance on productive outcomesIndicators Treatment Control ATT t value

Working hour per day 11.00 11.05 -0.04 -0.06Number of non-farm activities 1.54 1.50 0.04 0.29Self-employed at non-farm (av. number) 0.34 0.31 0.03 0.57Annual salary received from non-farm sector (TK) 12585.39 17965.65 -5380.26 -1.11

Value of agricultural assets 5315.67 2132.21 3183.46 0.82Total credit 5787.84 5621.65 166.19 0.07

Land_purchased 0.01 0.01 0.00 -0.46

Purchase of agril tools 3732.19 49.32 3682.87 1.09

Non_food_expenditure 39998.82 40378.83 -380.01 -0.07

Annual expenses on durable goods (TK) 6076.52 3082.35 2994.18 1.3

Annual income from crop production (TK) 9266.94 12111.51 -2844.56 -0.81

Annual food expenditure (TK) 364806.02 391234.07 -26428.05 -1.25

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Table 6 : Impact of AWDD on productive outcomes

Indicators Treatment Control ATT t value

Working hour per day 10.53 10.98 -0.45 -0.54Number of non-farm activities 1.46 1.26 0.20 1.19Self-employed at non-farm (av. number) 0.29 0.27 0.02 0.26Annual salary received from non-farm sector (TK) 9384.93 15255.58 -5870.66 -1.17Annual income from livestock (TK) 2208.19 4612.41 -2404.23 -2.32Value of agricultural assets 705.02 4141.13 -3436.11 -2.72Spending in fertilizer (Tk/farm) 773.06 1024.82 -251.76 -1.02 Total credit 4936.21 4534.48 401.72 0.27Land purchased (yes=1) 0.00 0.03 -0.02 -1.9Non-food expenses (TK) 33468.16 36404.03 -2935.87 -1.21 Annual expenses on durable goods (TK) 2416.01 3541.38 -1125.37 -1.05Annual Food Expenditure (TK)

346637.13 341914.00 4723.13 0.23Annual Health Expenditure (TK) 600.4 353.8 246.7 1.58

Indicators Treatment Control ATT t value

Number of farm activities 0.94 0.57 0.37 7.75

Number of non-farm activities 1.16 1.71 -0.56 -4.27

Day_labourer at non-farm activities 0.12 0.22 -0.10 -3.35

Self employment in farm activities 1.46 0.78 0.68 9.74

Self-employed at non-farm (av. number) 0.34 0.47 -0.13 -2.04

Income from livestock products 8213.77 5988.32 2225.45 1.86

Value of agricultural assets (TK) 15969.10 6195.55 9773.56 3.37

Spending in fertilizer (Tk/farm) 4135.11 1911.02 2224.08 5.02

Total credit 8911.43 10648.65 -1737.22 -0.42

Asset sold 0.06 0.03 0.02 1.64

Purchase of agril tools 1049.13 553.39 495.73 0.68

Annual income from crop production (TK) 54771.11 26231.54 28539.58 5.85

Annual food expenditure (TK) 510080.11 494596.49 15483.62 0.77

Table 7 : Impact of Agriculture Rehabilitation Program on productive outcomes

ARP is a promising means of safety net for the marginal & small farmers This type of safety net for farming communities could contribute more to productive

outcomes

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Indicators Treatment Control ATT t value

Number of non-farm activities 1.74 1.46 0.28 2.19

Day labourer in non-farm activities 0.31 0.19 0.12 3.81

Self-employed at non-farm (av. number) 0.55 0.55 0.00 0.07

Annual salary received from non-farm sector (TK) 11100.54 9085.60 2014.94 0.83

Value of agricultural assets (TK) 6053.90 5101.76 952.14 0.39

Spending in fertilizer (Tk/farm) 962.22 1493.66 -531.44 -0.87

Purchase of agril tools 1046.58 809.03 237.55 0.29

Annual non-food expenses (TK) 42798.61 50449.31 -7650.71 -2.11

Annual expenses on durable goods (TK) 3397.31 5119.98 -1722.67 -1.54

Annual income from crop production (TK) 15712.61 15688.14 24.47 0.01

Annual food expenditure (TK) 451680.60 479105.19 -27424.59 -1.53

Annual education expenditure (TK) 4509.41 4981.19 -471.79 -0.76

Annual health expenditure (TK) 824.58 556.24 268.35 1.7

Table 8 : Impact of Stipend for Primary Education Program on productive outcomes

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Indicators Treatment Control ATT t value

Number of non-farm activities 1.99 1.76 0.23 1.07

Self-employed at non-farm (av. number) 0.68 0.34 0.34 3.59

Ann. salary received from non-farm (TK) 42445.60 32772.68 9672.92 0.99

Value of agricultural assets (TK) 4621.59 11844.66 -7223.07 -2.28

Total credit 25295.45 57354.55 -32059.09 -1.53

Purchase of agril tools 108.41 105.63 2.78 0.04

Annual expenses on durable goods (TK) 11901.73 6063.86 5837.86 0.98

Income from vegetable production 4679.35 4084.61 594.73 0.31

Annual food expenditure (TK) 580628.93 565582.52 15046.41 0.34

Annual education expenditure (TK) 13472.40 10671.86 2800.54 1.41

Annual health expenditure (TK) 981.98 458.84 523.15 1.95

Table 9 : Impact of Secondary & Higher Secondary Education Program

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Phase 2: Outcomes at community level, evidence and documents on the productive outcomes

FGD & KII

HIES community survey data collected

RQ

1)What are the productive outcomes of selected safety nets at the community level ?

2)Is there any difference between the productive outcomes of male and female at community level?

1)What are the successful examples of government & NGOs safety nets interventions which foster productive outcomes?

2)What are the recommendations for adjustment and actions?

3)What would be the alternative coordination/ integration mechanism at the local and central level?

Research Questions

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Phase 3: Enhancing the productive outcomes of the SSN

For RQ (1)

International as well as regional programs similar to interventions has been reviewed

Particularly we aim to identify productive roles of widely cited safety net programs.

Program-impact matrix will be developed

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Based on the results in phase-I & 2, recommendations will be provided for adjustments & actions to be taken to maximize the productive outcomes

Recommendations will consider whether existing institutional & operational arrangements as well as policy frameworks can foster the changes recommended

Alternative coordination/integration mechanisms will also be explored

Phase 3: Research question 2 & 3

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Major activities and progress madeWork Plan Update/Progress made

Desk research: working on research problem, organizing literature review, formulating conceptual framework etc.

Completed (Literature review could be modified & improved)

Draft inception report Completed Preparation and submission of final inception report CompletedInception workshop at BAU CompletedDeveloping qualitative check list for FGDs/KIIs, pre-testing and finalizing checklists

Completed

Collecting secondary documents including the HIES 2010 data CompletedPreparation of methodological note which will incorporate qualitative check list, sample design, detailed fieldwork plan etc.

Completed

Sampling, selection of data enumerators and organizing training

Completed, Training will be organized before going to complementary field survey

Conducting complementary field survey at the community village level/FGD/KII

To be done

Data cleaning/preparation of HIES data Completed Data cleaning/preparation of complementary field survey data To be donePreparation and submission of draft interim report Submitted Data analysis and model estimation Going-onPreparation & submission of (a) draft report (b) dataset, codebooks & documentations (in electronic format)

To be done

Final workshop with results To be donePreparation and submission of final report (with dataset) /publications/writing articles

To be done

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