Wider impacts of microcredit: evidence from labor and human capital in urban Mexico

This paper presents an estimation of the impacts of microcredit on labor and human capital following a quasi-experiment specifically designed to control for endogeneity and selection bias in the context of urban Mexico. We find important indirect trickle-down effects of credit through labor expenditure that benefit poor laborers; however, these effects were only observed when loan-supported enterprising households reached a level of income well above the poverty line. We also find significant, although small impacts of credit on children´s schooling that could be potentially reinforced by improvements in lending technology, school grants and additional ex-ante preventive and ex-post protective riskcoping products

Active Labour Market Policies in Asia and the Pacific. A review of the literature

This paper reviews the evidence on the effectiveness of active labour market programmes in low- and middle-income countries with high informality, highlighting examples of interventions that have been implemented in combination with other policies including social protection measures. In reviewing the literature, we adopt a scoping review methodology to identify studies that look at a range of programme outcomes including earnings, employment, formality and productivity. We include studies from 2000 onwards, and after a thorough selection and screening process we end up with 106 papers for the review. Most of these studies find some positive aspect associated with the programme under study, although significant positive aspects are in many cases contingent on a specific target population, or time frame of programme and evaluation. We employ a theory of change conceptual framework to further discuss the channels, mechanisms and assumptions that are seen to underpin programme effectiveness (or the lack of). Success often depends on specific contextual factors and/or the joint implementation of different types of active and/or passive labour market policies, including specific social protection measures or other public policies

Social protection and the informal economy: What do we know?

This paper takes stock of the literature that examines how the recent expansion of contributory and non-contributory social protection programmes in low- and middle-income countries in Asia and the Pacific, Latin America and Africa has influenced the conditions and incentive mechanisms that underpin work choices in the informal economy. In reviewing the literature, we adopt a systematic review methodology to identify studies, which through experimental, quasi-experimental, or qualitative research designs examine modalities and design features of these policies and how they impact the transition of formal (or informal) workers to the informal (or formal) economy. Overall, we find that the existing evidence base is too limited to draw definitive conclusions about ‘how’ the expansion of social protection systems is impacting the informal economy. While certain policy reforms to contributory social insurance schemes have produced desirable incentives for workers to formalise, other types of non-contributory programmes seem to discourage workers from entering the formal economy. These effects are nonetheless small and among certain populations. The study underscores the need for further research to better understand the conditions that seem to be detrimental for formalization and the mechanisms that underpin these effects; and how policy reforms could mitigate these unintended outcomes while procuring social justice and equity

The distributional impacts of development cooperation projects

In 2015, world leaders committed, through the adoption of the 2030 Agenda for Sustainable Development, to reduce inequalities. Accordingly, a specific Sustainable Development Goals Goal (SDG 10) has been expressly devoted to address this challenge. The objective of this study is to test the validity of a proposed methodology that assesses the extent to which programmes and projects implemented or funded by development cooperation agencies contribute to the goal of reducing inequality. The study focuses on three projects funded by Agence Française de Développement: a programme that supports the improvement of urban housing in Tunisia, a programme that focus on building capacities of SMEs in Cameroon, and a budget support operation aimed to support a health sector reform in Colombia. Specifically, the study identifies whether programmes’ beneficiaries of the selected interventions belong to the bottom 40% of the wealth distribution, through a mix of analytical tools. First, a scoreboard that assesses whether or not inequality reduction is a central objective of development programmes; second, the Equity Tool, which helps assess the position of direct beneficiaries within the national (urban or rural) wealth distribution, and iii) the Commitment for Equity Tool, which helps estimate the distributional impact of general or sectoral budget support. Results show the efficacy of the methodology, in particular the possibility to obtain, with a limited budget and timeframe, relevant information about how, and the extent to which, development cooperation programmes reach the poorest bottom 40%, and whenever inequality reduction is an explicit objective of policy interventions. The methodology can be implemented ex-ante at baseline, before the implementation of projects or programmes, as well as ex-post, at endline of policy interventions. The analysis shows the efficacy of the methodology to evaluate the potential inequality reducing effects of development cooperation programmes and projects