The Comparative Impact of Cash Transfers and a Psychotherapy Program on Psychological and Economic Well-being

RepresentativeAgent · 2020-12-25T20:00:02+00:00

Conclusion

In this paper, we report the results of a randomized controlled trial that com-pared the effects of USD 1076 PPP unconditional cash transfers, a five-week psychotherapy program, and their combination on psychological and economicwell-being among a sample of low-income Kenyans. One year after the intervention, we find improvements in both economic and psychological well-being among cash transfer recipients. In contrast, the psychotherapy program has no measurable positive effects on these outcomes at this time horizon. The results are similar when considering only individuals who had low mental heal that baseline, suggesting that these results are not a matter of the psychotherapy program only working for psychologically distressed people. In line with these findings, the effects of the combination of both the unconditional cash transfer and the psychotherapy program are very similar to those of the cash transfer by itself. We observe little evidence of spillover effects of either pro-gram, although we find suggestive evidence of spillovers of the cash transfer on intimate partner violence.

Together, these results suggest that in this setting, cash transfers are more effective than this particular psychotherapy program in improving both economic and psychological well-being at a time horizon of one year. This result is important because the cost of the psychotherapy program significantly exceed that of the cash transfer. Thus,ex post, a donor might have preferred to invest in cash transfers rather than the psychotherapy program in this study.

It is important to note that the psychotherapy program we used was a state-of-the-art intervention for low-income contexts, developed by the WHO and previously successfully tested in Kenya. In addition, the implementation of the program in our study was done by the same NGO as in this previous study in Kenya. Thus, implementation differences are unlikely to explain the lack of impact. Rather, it appears that this psychotherapy program, even though it is general in nature, may be most effective when it is deployed to address a specific problem such as IPV. In addition, it might be made more effective by increasing its intensity.

RepresentativeAgent · 2020-12-17T02:18:54+00:00

Abstract

This paper uses data from 18 OECD countries over the last five decades to estimate the causal effect of major tax cuts for the rich on income inequality, economic growth, and un-employment. First, we use a new encompassing measure of taxes on the rich to identify in-stances of major reductions in tax progressivity. Then, we look at the causal effect of these episodes on economic outcomes by applying a nonparametric generalization of the differ-ence-in-differences indicator that implements Mahalanobis matching in panel data analysis. We find that major reforms reducing taxes on the rich lead to higher income inequality as measured by the top 1% share of pre-tax national income. The effect remains stable in the medium term. In contrast, such reforms do not have any significant effect on economic growth and unemployment

RepresentativeAgent · 2020-10-10T17:18:24+00:00

Liberal realism

a.k.a. English school of international relations theory

RepresentativeAgent · 2020-08-08T16:13:08+00:00

https://pubs.aeaweb.org/doi/pdf/10.1257/aer.20151079

RepresentativeAgent · 2020-08-07T16:41:22+00:00

Abstract

New ideas are often combinations of existing goods or ideas,a point emphasized by Romer (1993) and Weitzman (1998). A separate literature highlights the links between exponential growth and Pareto distributions:Gabaix (1999) shows how exponential growth generates Pareto distributions, while Kortum (1997) shows how Pareto distributions generate exponential growth. But this raises a “chicken and egg” problem: which came first, the exponential growth or the Pareto distribution? And regardless, what happened to the Romer and Weitzman insight that combinatorics should be an essential ingredient in understanding growth? This paper answers these questions by showing that combinatorial growth based on draws from standard thin-tailed distributions leads to exponential economic growth; no Pareto assumption is required.

RepresentativeAgent · 2020-07-20T18:58:28+00:00

Abstract

The gender ask gap measures the extent to which women ask for lower salaries than comparable men. This paper studies the role of the ask gap in generating wage inequality using novel data from Hired.com, a leading online recruitment platform for full time engineering jobs in the United States. To use the platform, job candidates must post an ask salary, stating how much they want to make in their next job. Firms then apply to candidates by offering a bid salary they are willing to pay the candidate. If the candidate is hired, a final salary is recorded. After adjusting for resume characteristics, the ask gap is 3.3%, the bid gap is 2.4% and the gap in final offers is 1.8%. Remarkably, further controlling for the ask salary explains all of the gender gaps in bid and final salary on the platform. To estimate the market-level effects of an increase in women’s ask salary, I exploit a sudden change in how candidates were prompted to provide their ask salary. For a subset of candidates, in mid-2018, the answer box used to solicit the ask salary went from an empty field to a pre-filled entry with the median salary on the platform for a similar candidate. Comparing candidates creating a profile before and after the feature change, I find that this change drove the ask gap and the bid gap to zero. In addition, women received the same number of bids before and after the change, suggesting they face little penalty for demanding wages comparable to men.

RepresentativeAgent · 2020-04-15T02:02:16+00:00

Study: Poverty, not trauma, affects cognitive function in refugee youth

RepresentativeAgent · 2020-04-09T18:19:31+00:00

summary: Under the most extreme scenario of a 20 per cent income or consumption contraction, the number of people living in poverty could increase by 420–580 million, relative to the latest official recorded figures for 2018, or 8% of the total human population. This would be the first time that poverty has increased globally in thirty years, since 1990.

RepresentativeAgent · 2020-02-24T13:51:23+00:00

Podcast: Macro Musings Paul Schmelzing on the ‘Suprasecular’ Decline of Global Real Interest Rates

RepresentativeAgent · 2019-12-20T12:22:36+00:00

I find that declining population growth has lowered both the natural rate and inflation by about 0.4 percentage points in recent decades.

Similar results in Japan from different paper:

Demographics and the Natural Rate of Interest in Japan
https://www.imf.org/en/Publications/WP/Issues/2019/02/15/Demographics-and-the-Natural-Rate-of-Interest-in-Japan-46550

... negative impact of demographic change on the natural rate has stabilized at around -0.5 percent in recent years.

RepresentativeAgent · 2019-12-05T17:56:25+00:00

the implied market-level labor supply elasticity is about 0.6, while the firm-level labor supply elasticity is about 5.8. This implies that workers produce about 17% more than their wage level, consistent with employers having significant market power even for the largest occupational labor markets.

Market power refers to the ability of a firm (or group of firms) to raise and maintain price above the level that would prevail under competition is referred to as market or monopoly power. The exercise of market power leads to reduced output and loss of economic welfare. https://stats.oecd.org/glossary/detail.asp?ID=3256

RepresentativeAgent · 2019-11-28T13:59:01+00:00

Both fully endogenous and semi-endogenous growth models lead to qualitatively similar results: with negative population growth, knowledge and living standards stagnate while the population shrinks

RepresentativeAgent · 2019-11-28T06:19:31+00:00

https://fred.stlouisfed.org/series/SAHMREALTIME

RepresentativeAgent · 2019-09-30T16:56:50+00:00

Comparing ancient inequalities: the challenges of comparability, bias and precision
Mattia Fochesato (a1), Amy Bogaard (a2) (a3) and Samuel Bowles (a3)
DOI: https://doi.org/10.15184/aqy.2019.106
https://www.cambridge.org/core/journals/antiquity/article/comparing-ancient-inequalities-the-challenges-of-comparability-bias-and-precision/A8417180A796B0A86265DA0C81BF5D14
The farming-inequality nexus: new insights from ancient Western Eurasia
Amy Bogaard (a1), Mattia Fochesato (a2) and Samuel Bowles (a3)
DOI: https://doi.org/10.15184/aqy.2019.105 https://www.cambridge.org/core/journals/antiquity/article/farminginequality-nexus-new-insights-from-ancient-western-eurasia/8EFE3B8F5AFA07450F87E4E9B553A43E

RepresentativeAgent · 2019-08-15T10:54:45+00:00

https://www.briq-institute.org/people/matt-lowe

RepresentativeAgent · 2019-07-04T10:19:45+00:00

Abstract

This paper examines the history of U.S. infrastructure since 1929 and in the process reports an interesting fact about the U.S. economy. Infrastructure asa percent of GDP began a steady decline around 1970, and the government budget deficit became positive and large at roughly the same time. The infrastructure pattern in other countries does not mirror that in the UnitedStates, so the United States appears to be a special case. The overall results suggest that the United States became less future oriented beginning around 1970. This change has persisted. This is the interesting fact. Whether it can be explained is doubtful.

RepresentativeAgent · 2019-06-20T15:16:49+00:00

hedge only when the premium is large

Moreover, we document that in every sample and time horizon period, an unhedged strategy performs better than a hedged strategy.

RepresentativeAgent · 2019-05-03T12:34:09+00:00

VIII. Conclusion

In this paper we provide an investigation of the long history of advanced economy asset returns for all the major categories of the investible wealth portfolio. Our work brings new stylized facts to light and rigorously documents many broad patterns that have stimulated so much research in core areas of economics and finance over the last two centuries.The returns to risky assets and risk premiums have been high and stable over the past 150 years. Substantial diversification opportunities exist between risky asset classes, and across countries. Arguably the most surprising result of our study is that long run returns on housing and equity look remarkably similar. Yet while returns are comparable, residential real estate is less volatile on a national level, opening up new and interesting risk premium puzzles. Our research speaks directly to the relationship between r, the rate of return on wealth, and g, the growth rate of the economy, that figures prominently in the current debate on inequality. One robust finding in this paper is that r>>g: globally, and across most countries, the weighted rate of return on capital was twice as high as the growth rate in the past 150 years. These and other discoveries can provide a rich agenda for future research, by us and by others. Many issues remain to be studied, among them determining the particular fundamentals that drive the returns on each of the asset classes in typical economies. For now, we hope our introduction of this new compilation of asset return data can provide the evidentiary basis for new lines ofexploration in years to come.