Research has shown a correlation between stunting, lower IQs, and poorer socioeconomic outcomes later in life. At the two-year mark, PKH had no impact on child stunting. And yet, because height is a measure of health that expresses itself cumulatively over time, it was possible that stunting would start to be reversed only after continued assistance from the program.
That was precisely what happened. We found similar effects with respect to education. At the two-year mark, PKH had increased school enrollment for children aged , but not for those aged At the time, we reasoned that older children who had dropped out prior to the program would have a harder time returning to school than would their younger counterparts, even if their family resources had recently improved.
But we suspected that if families could benefit from sustained access to the program, their kids would not drop out at an earlier age, with enrollment among those in the age bracket thus improving over time.
Again, this turned out to be the case. The importance of these improvements in health and education can hardly be overstated. Leaving aside the obvious moral arguments for guaranteeing children access to nutrition and schooling, these investments in low-income households will likely translate into far-reaching economic benefits, including increased labor-market participation and productivity. And that, in turn, could lead to reduced participation in social programs themselves.
More to the point, these gains were made possible by a cumulative investment in children over the course of six years. Most likely, these results would not have been achieved under a program providing temporary or sporadic benefits.
In the case of PKH, children who grow up healthier and more educated will arguably be better positioned to earn higher incomes and work longer into the future. Of course, to confirm this empirically, we would need to follow the original sample population into adulthood as they enter the workforce and develop careers.
In the meantime, critics will doubtless argue that the program creates dependency for able-bodied adults today. Ontario to give poor a basic income. How did we get to this welfare state?
Inequality is bad for growth, says OECD. Image source, Getty Images. Ultimate responsibility. This idea is not without its enemies. Welfare trap? Demographic change. Many countries have seen a large rise in working mothers in recent decades. Paradise Papers: Everything you need to know about the leak of financial documents regarding various offshore arrangements.
Bismarck's welfare state reforms in the s were designed to stop voters backing the rival socialist party. Image source, Alamy. Some business organisations opposed Roosevelt's New Deal reforms as "un-American".
The next industrial revolution? More from Tim Harford:. Universal basic income? Some evidence suggests it's worth considering. Image source, Dauphin Tourism. Results of the s "mincome" experiment in Dauphin were surprising.
Will Finland's basic income trial help the jobless? Ontario to try giving poor a basic income. Related Topics. Economic inequality Economic growth.
Published 26 October Published 19 October Published 24 April Today, the fixation on dependency and its consequences is no less acute. Following a new directive by the Trump administration, Kentucky, Arkansas, and 14 other US states have announced or introduced work requirements as a condition of eligibility for Medicaid public health insurance for the poor.
But the idea that government assistance drives dependency is not unique to any country, even if all countries face unique challenges in providing safety nets for the poor. Moreover, beliefs about dependency are not just common among the rich; one often hears similar complaints from the very people whom social programs are meant to help.
It is thus little wonder that such beliefs would translate into policy. Using the World Values Survey, my colleagues and I have assessed how much people attribute poverty to laziness, as opposed to social and economic unfairness, and how it relates to beliefs on redistribution. We find that the more people attribute poverty to a lack of willpower, the less generous the transfer system in their country will be. So, beliefs about dependency can have real and tangible implications for the poor and the protections they need.
But what if those beliefs are wrong? For example, far from creating dependency, it is possible that welfare programs actually give people the necessary tools to achieve financial independence, provided that the assistance is dependable rather than sporadic and temporary. In that case, the provision of government assistance over an extended period of time could yield high social and economic returns, not least by allowing low-income families to make longer-term investments for the future.
The program was implemented in randomly selected sub-districts, which were compared to a control group of sub-districts that did not have the program. Moreover, the program was directed at families, which were encouraged to use the benefits to invest in their children.
Only households with children or a pregnant woman could enroll, and a portion of the stipend was made conditional on fulfilling various health- and education-related obligations, such as basic immunization and the completion of at least nine years of school.
As in many countries, these conditions are hard to enforce in practice, so many households received full payments despite non-compliance. One important feature of PKH is that it did not merely provide a few weeks or months of assistance between jobs or in the case of a financial shock. Rather, it focused on the very poor, and was administered for at least six years, with the understanding that climbing out of poverty takes time and requires consistent support and stability.
Given this initial success, the Indonesian government expanded the program widely over the next few years. By , it was providing assistance to about 2. Now, however, the government was targeting specific districts, rather than following the previous random-selection process. As a result, many of the sub-districts in the initial control group were left out, and have not received the program yet.
Upon re-surveying the 14, households in the original treatment and control groups, we found several interesting outcomes. She soon found two jobs and is able to help put her children through college. Aid is less temporary for others. He eventually got the health care he needed and has applied for disability, but he lost his job and his home and will likely never walk again.
She was homeless for a while until she was able to afford a room in a boarding house and then qualify for subsidized housing. Lilly was married with a home and a thriving Avon business. After only a few years of marriage, she realized that if she stayed with the physically and emotionally abusive man she had married, she might not survive. She escaped, only to find herself in a new town with no money, no home, no family and no job. Her dog may seem like an unnecessary expense, but he provides crucial comfort for Lilly as she moves toward self-sufficiency.
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