# Phenomenal World

## Lay of the Land

### A new paper on the labor effects of cash transfers

SARAH BAIRD, DAVID MCKENZIE, and BERK OZLER of the WORLD BANK review a variety of cash transfer studies, both governmental and non-governmental, in low- and middle-income countries. Cash transfers aren’t shown to have the negative effects on work that some fear:

"The basic economic model of labor supply has a very clear prediction of what should be expected when an adult receives an unexpected cash windfall: they should work less and earn less. This intuition underlies concerns that many types of cash transfers, ranging from government benefits to migrant remittances, will undermine work ethics and make recipients lazy.

Overall, cash transfers that are made without an explicit employment focus (such as conditional and unconditional cash transfers and remittances) tend to result in little to no change in adult labor. The main exceptions are transfers to the elderly and some refugees, who reduce work. In contrast, transfers made for job search assistance or business start-up tend to increase adult labor supply and earnings, with the likely main channels being the alleviation of liquidity and risk constraints."

Link to the working paper. Table 2—which covers the channels through which cash impacts labor, is especially worth a read—as many studies on cash transfers don’t go into this level of detail.

• A study on a large-scale unconditional cash transfer in Iran: "With the exception of youth, who have weak ties to the labor market, we find no evidence that cash transfers reduced labor supply, while service sector workers appear to have increased their hours of work, perhaps because some used transfers to expand their business." Link.
• Continuing the analysis of Hauschofer and Schapiro’s controversial results from a cash study transfer in Kenya, Josh Rosenberg at GiveDirectly has, at the end of his overview, some thoughtful questions for continuing research: "Is our cost-effectiveness model using a reasonable framework for estimating recipients’ standard of living over time?… GiveDirectly provides large, one-time transfers whereas many government cash transfers provide smaller ongoing support to poor families. How should we apply new literature on other kinds of cash programs to our estimates of the effects of GiveDirectly?" Link.

## POSTAL OPTION

### Renewed interest in an old model

Last week we linked to the widely publicized news that SENATOR KIRSTEN GILLIBRAND would be pushing legislation to reintroduce government-run commercial banking through the United States Postal Service.

In a 2014 article for the HARVARD LAW REVIEW, law professor and postal banking advocate MEHRSA BARADARAN describes the context that makes postal banking an appealing solution:

“Credit unions, S&Ls, and Morris Banks were alternatives to mainstream banks, but they were all supported and subsidized by the federal government through targeted regulation and deposit insurance protection.

Banking forms homogenized in the 1970s and 1980s, leaving little room for variation in institutional or regulatory design. Eventually, each of these institutions drifted from their initial mission of serving the poor and began to look more like commercial banks, even competing with them for ever-shrinking profit margins.

The result now is essentially two forms of banks: regulated mainstream banks that seek maximum profit for their shareholders by serving the needs of the wealthy and middle class, and unregulated fringe banks that seek maximum profits for their shareholders by serving the banking and credit needs of the poor. What is missing from the American banking landscape for the first time in almost a century is a government-sponsored bank whose main purpose is to meet the needs of the poor."

## ONTARIO FOR ALL

### Canada calculates expanding Ontario's guaranteed income to the entire nation

Canada’s Parliamentary Budget Office looks at the cost of expanding the Ontario pilot nationwide. Full report here. ht Lauren

ANDREW COYNE of the NATIONAL POST summarizes the findings (all figures are in Canadian dollars):

“The results, speculative as they are, are intriguing. The PBO puts the cost of a nationwide rollout of the Ontario program, guaranteeing every adult of working age a minimum of 16,989 CAD annually (24,027 CAD for couples), less 50 per cent of earned income—there’d also be a supplement of up to 6,000 CAD for those with a disability—at 76.0 billion CAD.
“Even that number, eye-watering as it is (the entire federal budget, for reference, is 312 billion CAD), is a long way from the 500 billion CAD estimates bandied about in some quarters.

## URBAN WEALTH FUNDS

### Social wealth funds on the municipal level

Matt Bruenig, Roger Farmer and Miles Kimball, and Sam Altman have all pushed for versions of a US sovereign wealth fund for social good. Their work focuses on funds at the national level. But another version of the idea comes from Dag Detter and Stefan Fölster, whose 2017 book advocates for “urban wealth funds,” funded via better management of government land and other nonfinancial assets. A few such funds have already had success.

Using Boston as an example of a city that could profit from an urban wealth fund, Detter writes for the World Economic Forum in February:

“…Like many other cities, Boston does not assess the market value of its economic assets. Unlocking the public value of poorly utilized real estate or monetizing its transportation and utility assets – smarter asset management, in other words – would yield a return that would enable it to more than double its infrastructure investments. Through smarter asset management, Boston could improve its public transport system and other services without needing to opt for privatization, raise taxes or cut spending elsewhere.

“What’s the catch? Actually, there isn’t one.”

Link to the full post. A 2017 Brookings report showed how Copenhagen successfully implemented urban wealth fund policy:

“This paper explores how the Copenhagen model can revitalize cities and finance large-scale infrastructure by increasing the commercial yield of publicly owned land and buildings without raising taxes. The approach deploys an innovative institutional vehicle—a publicly owned, privately run corporation—to achieve the high-level management and value appreciation of assets more commonly found in the private sector while retaining development profits for public use.”

• Another successful version of urban value capture: Hong Kong’s metro (the MTR). “Hong Kong is one of the world’s densest cities, and businesses depend on the metro to ferry customers from one side of the territory to another. As a result, the MTR strikes a bargain with shop owners: In exchange for transporting customers, the transit agency receives a cut of the mall’s profit, signs a co-ownership agreement, or accepts a percentage of property development fees. In many cases, the MTR owns the entire mall itself.” Link.
• Detter and Fölster’s previous book envisions better management of government assets on the national level.

## DISTINCT FUSION

### Tracking the convergence of terms across disciplines

In a new paper, CHRISTIAN VINCENOT looks at the process by which two synonymous concepts developed independently in separate disciplines, and how they were brought together.

“I analyzed research citations between the two communities devoted to ACS research, namely agent-based (ABM) and individual-based modelling (IBM). Both terms refer to the same approach, yet the former is preferred in engineering and social sciences, while the latter prevails in natural sciences. This situation provided a unique case study for grasping how a new concept evolves distinctly across scientific domains and how to foster convergence into a universal scientific approach. The present analysis based on novel hetero-citation metrics revealed the historical development of ABM and IBM, confirmed their past disjointedness, and detected their progressive merger. The separation between these synonymous disciplines had silently opposed the free flow of knowledge among ACS practitioners and thereby hindered the transfer of methodological advances and the emergence of general systems theories. A surprisingly small number of key publications sparked the ongoing fusion between ABM and IBM research.”

Link to a summary and context. Link to the abstract. ht Margarita

• Elsewhere in metaresearch, a new paper from James Evans’s Knowledge Lab examines influence by other means than citations: “Using a computational method known as topic modeling—invented by co-author David Blei of Columbia University—the model tracks ‘discursive influence,’ or recurring words and phrases through historical texts that measure how scholars actually talk about a field, instead of just their attributions. To determine a given paper’s influence, the researchers could statistically remove it from history and see how scientific discourse would have unfolded without its contribution.” Link to a summary. Link to the full paper.

## DEPENDENCE EXTERIOR

### State universities' reliance on out-of-state enrollment

Research on enrollment patterns finds that shrinking state funds leads admissions departments to look for out-of-state tuition financing.

"Fixed effects panel models revealed a strong negative relationship between state appropriations and nonresident freshman enrollment. This negative relationship was stronger at research universities than master’s or baccalaureate institutions. These results provide empirical support for assertions by scholars that state disinvestment in public higher education compels public universities to behave like private universities by focusing on attracting paying customers.

We contribute to a growing body of evidence that showing that university revenue seeking behaviors are associated with a strong Matthew Effect. Cheslock and Gianneschi showed that only flagship research universities could generate substantial revenues from voluntary support. Therefore, increasing reliance on voluntary support increases the differences between ‘have’ and ‘have-not’ universities. Similarly, our results suggest that relying on nonresident enrollment growth to compensate for declines in state appropriations also increases the difference between the haves and the have-nots. Many public universities may desire tuition revenue from nonresident students. However, descriptive statistics suggest that only research universities are capable of generating substantial nonresident enrollment."

• An NBER working paper, from 2016, produces similar findings in the case of international student enrollment: "Our analysis focuses on the interaction between the type of university experience demanded by students from abroad and the supply-side of the U.S. market. For the period between 1996 and 2012, we estimate that a 10% reduction in state appropriations is associated with an increase in foreign enrollment of 12% at public research universities and about 17% at the most resource-intensive public universities." Link to the paper, link to a summary.

## BRUTAL ATTACHMENTS

### A new report on the criminalization of debt

Last week, the ACLU published a report entitled "A Pound of Flesh: The Criminalization of Private Debt." It details the widespread use of the criminal justice system in the collection of debts—including medical, credit card, auto, education and household—in many cases resulting in de facto debtor's jails.

"In 44 states, judges—including district court civil judges, small-claims court judges, clerk-magistrates, and justices of the peace—are allowed to issue arrest warrants for failure to appear at post-judgment proceedings or for failure to provide information about finances. These warrants, usually called 'body attachments' or 'capias warrants,' are issued on the charge of contempt of court.

At the request of a collection company, a court can enter a judgment against a debtor, authorize a sheriff to seize a debtor's property, and order an employer to garnish the debtor's wages.… In most of the country, an unpaid car loan or a utility bill that's in arrears can result in incarceration."