In Practice Moving Up the Ladder Economic Inclusion of Safety Net Recipients in Bangladesh By S. Amer Ahmed, Jumana Alaref, Mehtab Azam, Nazia Moqueet, and Jyotirmoy Saha Partnership for Economic Inclusion Grantee 8 © 2023 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. 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Cover photo: Shehzad Noorani / World Bank Volume 8 June 30, 2023 Partnership for Economic In Practice Grantee Inclusion The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh Contents Acknowledgments iv About the In Practice series v Abbreviations vi Interactive Table of Contents Click to navigate Introduction: Cash Transfers as the First Rung on the Ladder 7 Readiness of Safety Net Beneficiaries to Move Up the Ladder 11 Profiles of Potential Economic Inclusion Target Groups 15 Variation in Outcomes among Social Safety Net Beneficiaries 19 Differences in Human Development Outcomes between Beneficiaries and Nonbeneficiaries 26 Services that can Help Social Safety Net Beneficiaries Improve their Livelihoods 30 Access to and Quality of Services 31 Alignment of Program Design with Recipient Needs, Capabilities, and Aspirations 32 Overcoming Cost and Capacity Barriers to Implementation 38 Conclusion 40 Appendixes 41 A - Results of Ordinary Least Squares and Propensity Score Matching Models 42 B - Questions Asked to Identify Personality Traits of Recipients 44 C - Service Mapping and Market Assessment 45 Notes 46 References 48 The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh Boxes 3.1 Quantitative survey sampling methodology 16 3.2 Propensity score matching methodology 27 Figures 2.1 Microcredit and social assistance coverage, by wealth quintile 13 3.1 Distribution of social safety net beneficiary households, by wealth quintile 17 3.2 Shares of households receiving social safety net support that are in paid employment 17 3.3 Sources of income of households receiving social safety net support 18 3.4 Work and study activities of household members receiving social safety net support 18 3.5 Share of social safety net beneficiaries facing a shock in previous 12 months 19 3.6 Work and education status of head of households receiving social safety net support 19 3.7 Education status of social safety net beneficiaries 19 3.8 Reasons social safety net recipients report for not attending school 20 3.9 Scores of male and female social safety net recipients on the Big Five personality traits 20 3.10 Level of difficulty across four measures of functional disability 21 3.11 Work status of social safety net recipients in last seven days 22 3.12 Type of work performed by social safety net recipients 23 3.13 Family support of and constraints to working among ISPP beneficiaries 23 3.14 Sector and job preferences cited by ISPP beneficiaries 24 3.15 Constraints to finding additional work cited by WA and DA beneficiaries 25 3.16 Self-reported measures of psychological well-being and life satisfaction among social safety net beneficiaries 25 3.17 Scores of WA beneficiaries on Big Five personality traits, by age range 25 3.18 Measures of life satisfaction among WA beneficiaries, by age range 26 3.19 Difference in human development outcomes in social safety net beneficiaries and nonbeneficiaries 28 4.1 Features and concerns about childcare facilities cited by ISPP recipients 32 4.2 Recommended sequencing of economic inclusion interventions 34 5.1 Per capita costs and number of beneficiaries of cash plus programs in selected countries 38 The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh Tables 1.1 Largest social safety net programs in Bangladesh, FY22–23 8 2.1 Overview of Bangladesh’s Widowed, Deserted, and Destitute Women Allowance (WA), Disability Allowance (DA), and Income Support Program for the Poorest (ISPP) programs 12 4.1 Critical and auxiliary services that could be part of an integrated package of services 30 4.2 Proposed interventions based on constraints facing each beneficiary group 33 A.1 Results of ordinary least squares and propensity score matching models 42 B.1 Questions asked to identify personality traits of beneficiaries 44 C.1 Interviews conducted with key informants to map service provision by social safety net programs 45 C.2 Methodologies used to assess the market for livelihood opportunities for social safety net beneficiaries 45 The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh Acknowledgements This report was prepared under the direction and guidance of Stefano Paternostro, Lynne D. Sherburne-Benz and Abdoulaye Seck (World Bank). Quantitative and qualitative data collection for this report was handled by the Nielson Company, under the leadership of Fazle Rabbi, and the Development Research Initiative, under the leadership of Munshi Sulaiman. The report greatly benefited from thoughtful comments and inputs from Shawkat Ali, Ashiq Aziz, Aneeka Rahman, Mostafa Amir Sabbih, and Cristobal Ridao-Cano, as well as from comments from peer reviewers Colin Andrews and Daisy Demirag (World Bank). The report benefited from the generous funding of the Partnership for Economic Inclusion and the Human Capital Umbrella Multi-Donor Trust Fund, which is gratefully acknowledged. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh iv About the In Practice Series The Partnership for Economic Inclusion introduces the In Practice series featuring accessible, practitioner-focused publications that highlight learning, good practice, and emerging innovations for scaling up economic inclusion programs. Guide to navigation The In Practice series is interactive and provides built-in technical features to assist readers as they progress, including a navigation bar, progress bar, and the ability to jump to endnotes and back to the text throughout. Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Chapter navigation Progress bar Jump notes1 The navigation bar at the The progress bar tracks your 1. Notes throughout the text are linked top of each page allows easy progress through each chapter to allow easy navigation between navigation with a simple click. and throughout the document. endnotes and the main text. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh v Abbreviations DA Disability Allowance FY fiscal year G2P government-to-person HIES Household Income and Expenditure Survey ISPP Income Support Program for the Poorest NGO nongovernmental organization NSSS National Social Security Strategy OLS ordinary least squares PSM propensity score method SSN social safety net UPG Ultra-poor Graduation WA Widowed, Deserted, and Destitute Women Allowance The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh vi Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Introduction Cash Transfers as the First Rung on the Ladder Bangladesh made substantial progress in increasing per capita income and reducing poverty over the past few decades, despite some backsliding during the COVID-19 pandemic. Annual GDP growth averaged 5 to7 percent in 2000–10 and 2011–19 (World Bank 2019). Per capita income rose from US$1,017 in 2011 to US$1,593 in 2020, and the poverty headcount fell from 49 percent in 2000 to 24 percent in 2016 (World Bank 2019). During this period, human development percent of GDP (13 percent of the total 1 outcomes improved significantly. Food and budget) (Ministry of Finance 2022). These nutrition security increased, child mortality programs include various types of cash and in- declined, and life expectancy rose (World kind transfers, microcredit and microfinance Bank 2019). Bangladesh also met several programs, stipends, humanitarian support, targets of the Millennium Development Goals and skills development initiatives. (MDGs), including reducing the prevalence of underweight children, narrowing gender In 2015, the government crafted the National gaps in primary and secondary education, Social Security Strategy (NSSS), to provide reducing under-five mortality and HIV coherence and long-term planning to the infection rates, and increasing cure rates of social protection and labor landscape for tuberculosis (GED 2015a). The COVID-19 further poverty reduction and human pandemic reversed some of the positive trends development progress. It articulates an in socioeconomic development, leading to a ambitious goal of eliminating extreme rise in economic inequality and a 4 percent poverty, facilitated by a more inclusive social increase in poverty rates (World Bank 2021a). protection system that mitigates life cycle risks and reduces leakages. It also envisions The government of Bangladesh played a expanding coverage of core programs for critical enabling role during this period by the extreme poor and the country’s most expanding the provision of social safety nets vulnerable people, focusing on mothers, (SSNs) targeting the poor and vulnerable. children, adolescents, youth, seniors, and In its FY2021–22 budget, social protection people with disabilities. and labor market programs net of budget allocations for the noncontributory civil SSNs are, and will remain, prominent in the service pensions were equivalent to 2.3 government’s social protection portfolio. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 7 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Table 1.1 Largest social safety net programs in Bangladesh, FY22–23 Program Number of Beneficiaries Budget Millions Percent of Total (Taka (Tk) Per beneficiary (Tk) population billions) Vulnerable Group Feeding 18.0 10.6 9.9 551 Student Stipend for Primary 14.0 8.3 19.0 1,357 Education Food Friendly Program 6.3 3.7 25.4 4,038 Old Age Allowance 5.7 3.4 34.4 6,043 Stipends for secondary, higher- 5.3 3.1 19.8 3,735 secondary, and madrasah education Gratuitous Relief 3.3 1.9 5.9 1,788 Allowances for Widowed, 2.5 1.5 14.9 5,982 Deserted, and Destitute Women Allowance for Financially Insolvent 2.4 1.4 24.3 10,122 Disabled Work for Money 1.8 1.1 15.0 8,333 Mother and Child Benefit Program 1.3 0.8 12.4 9,562 Vulnerable Women Benefit 1.0 0.6 18.4 17,695 Program Food for Work 1.0 0.6 8.8 8,942 Employment Guarantee Program 0.5 0.3 18.3 35,328 for Poorest Test Relief 0.4 0.2 14.5 39,295 Honorarium for Heroic Freedom 0.2 0.1 46.5 232,668 Fighter Sources: Ministry of Finance 2022; World Bank 2020. The 10 largest social protection and labor et al. 2009). Cash transfer programs have also programs are cash transfers, public works, in- been shown to improve education, health, kind transfers, and poverty-targeted stipends and nutrition indicators (Afzal, Mirza, and (table 1.1). Arshad 2019; Cotto 2018; and Fiszbein et al. 2009). The well-studied poverty-targeted The evidence on the benefits of cash transfers conditional cash transfer programs of in supporting the consumption of the Mexico (Oportunidades) and Brazil (Bolsa poor is substantial. When appropriately Familia), for example, had substantial effects targeted, such programs have reduced both on food consumption and lasting impacts the incidence and the severity of poverty on educational outcomes and women’s (Molyneux, Jones, and Samuels 2016; Fiszbein empowerment. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 8 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Standalone cash transfer interventions alone services, such as training, microfinance, and will not be sufficient to operationalize the other services. vision of the NSSS or meet Bangladesh’s future development needs, however. These Programs to support productivity and labor transfers, which are intended to either market outcomes for the poor and vulnerable provide revenue for low-income families are increasingly packaging services to increase or support human capital gains, often their effectiveness. These programs are often have mixed outcomes on labor market referred to as economic inclusion programs. performance. When built around a cash transfer, these programs are called cash plus programs. A cross-country review of conditional Economic inclusion programs that integrate cash transfers that targeted households livelihood support, skills development, and with children in utero or at school age social empowerment interventions can shows significant long-term impacts on provide an exit strategy for cash transfer educational attainment but mixed impacts beneficiaries by providing them with higher on employment and earnings and limited earnings and employability prospects. effects on cognitive skills, learning, and socio-emotional skills (Millán et al. 2019). Evidence on programs from 37 countries Bangladesh’s Female Secondary Education suggests that comprehensive economic Stipend Program (FESP) had substantial inclusion programs have a greater impact on effects on female educational outcomes socioeconomic development and women’s but mixed impacts on female labor market empowerment than single-instrument outcomes. The program increased female interventions (Andrews et al. 2021). labor force participation but lowered Impact evaluations of several labor market wages by 17 percent, as stipend recipients programs supported by the Inter-American often ended up in low-productivity self- Development Bank in Latin America find employment activities (Shamsuddin 2015). An that comprehensive and demand-driven evaluation of Mexico’s Oportunidades finds programs can be effective when focused that the cash transfers were not associated on poor (or otherwise disadvantaged) with improvements in wages, employment, youth who have difficulty entering the or intergenerational mobility (Rodriguez- labor market (Ibarrarán and Shady 2009). Oreggia and Freije 2012). World Bank investment lending for youth employment projects increasingly integrates Some households and individuals who need interventions. The Kenya Youth Employment cash transfers may be able to benefit from and Opportunities Project, for example, other services that could help them protect, offers a package of services that includes insure, or invest in their human capital and providing training and work experience in boost their livelihoods. Most households the formal and informal sectors, improving at the bottom of the income distribution the productivity and job creation potential of need consumption support because they existing microenterprises and self-employed are vulnerable to shocks, at risk of poverty, youth, and supporting new innovative face liquidity constraints, and have limited approaches to improve job and earning precautionary savings, all of which may limit opportunities among hard-to-serve youth their ability to boost their livelihoods even if (World Bank 2016). they have more education or skills. Moving up the distribution, there may be low- Bangladesh has a history of effective economic income individuals who have the capability inclusion programs, but they are implemented and aspirations to improve their earnings primarily by civil society organizations. if provided an appropriate combination of BRAC’s long-running Ultra-Poor Graduation The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 9 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder (UPG) program provides households living potential to benefit from economic inclusion below the poverty line with a sequenced set programming. The first two groups receive of interventions, including asset transfers, support from the Widowed, Deserted, and business and life skills training, mentorship, Destitute Women Allowance (WA) and the access to financial services, and linkages Disability Allowance (DA) cash transfer to community and market resources. A programs, implemented by the Department longitudinal evaluation shows that program of Social Services under the Ministry of Social beneficiaries experienced a 37 percent Welfare. The Local Government Division’s increase in annual income, a 10 percent Jawtno (Income Support Program for the increase in consumption expenditure, and a Poorest (ISPP)) program caters to the third significant increase in savings and access to group of beneficiaries. While many widows land, which they sustained seven years after and people with disabilities need long-term exiting the program (BRAC 2019). cash support through SSNs; people who are of productive capacity and are of working age Government-implemented initiatives are (15–64) can benefit greatly from additional critical for scale. The NSSS notes that the support through labor market interventions government’s social protection portfolio will that improve earnings, productivity, and skills require progressive but substantive scaling development. up of graduation or economic inclusion programs that target the poor to complement The report is organized into six sections. its safety nets. Labor market interventions Section 2 describes the socioeconomic in Bangladesh primarily include active labor characteristics of the three low-income market programs. These programs account groups and identifies gaps in their access to for 8–13 percent of the social protection and coverage by the government’s main social expenditure, depending on the year, and tend protection programs. Section III profiles to be small (World Bank 2021b). There are no a subset of SSN beneficiaries and presents government-implemented economic inclusion findings on their potential to benefit from programs in Bangladesh that meet the economic inclusion programming. Section IV socioeconomic needs of the poor on a large describes packages of services that could help scale. The government can leverage its strong beneficiaries access services and improve their and expansive SSN system to develop ladders economic livelihoods. Section V examines the 2 for poor and vulnerable households. factors that need to be in place for economic inclusion programs to succeed. Section VI This report examines three groups of SSN provides recommendations on how the beneficiaries—working-age widows, people government can build capacity to implement with disabilities, and households with young economic inclusion at scale in Bangladesh. children—in order to understand their The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 10 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries Potential Target Help Improve and Capacity to Move Up the Groups Livelihoods Barriers Ladder Readiness of Safety Net Beneficiaries to Move up the Ladder Marginalized populations in Bangladesh are stigmatized and often lack access to government support, increasing their vulnerability. One of these groups is widows, people with disabilities, and mothers with children under five. According to the 2016–17 Household Income and Expenditure Survey (HIES), 6 percent of households in Bangladesh are headed by widows. The 2016–17 Labor Force Survey indicates that 61 percent of widows who are of working age are not in education, employment, or training. Those who are working are often restricted to low-paying and exploitative livelihoods in domestic service, agriculture, and begging (Islam 2020). Widows in the poorest quintile have lower than limited employment opportunities, low average consumption per capita, limited access access to credit services, social stigma, and to land (13 percent), and a high dependency discrimination (NFOWD and HI 2005). Like ratio (0.85), according to the HIES. Their households headed by widows, households with economic vulnerabilities are linked with social people with disabilities have high dependency constraints in the household, where they have ratios and low consumption per capita. Wage limited to no decision-making power, and in work accounts for 76 percent of household their broader communities, where they face income in households with a person with a social stigma and are considered burdens to disability, but employment of these people society (Islam 2020). tends to be exploitative, irregular, and informal. People with disabilities are vulnerable to Mothers with children under five face various shocks because of their limited access to constraints, including lack of childcare options livelihoods and the social discrimination and restrictive gender norms that prevent they face. The 2016–17 HIES estimates that them from engaging in the labor market. Young 13 percent of households in Bangladesh have mothers with children under two represent 13 at least one member of working age (15–64) percent of households in Bangladesh. Twenty with a disability. People with disabilities are percent of them are in the poorest consumption more likely to live in poverty and suffer from quintile, according to the HIES. Findings from vulnerabilities because of lack of literacy, the 2016–17 Labor Force Survey indicate that The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 11 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries Potential Target Help Improve and Capacity to Move Up the Groups Livelihoods Barriers Ladder the negative impact of marriage on female labor The WA is one of the few programs that targets force participation is diminishing in rural areas widows (table 2.1). It provides an unconditional but that urban women are still 6.4 percentage monthly transfer of Tk 500 (US$5), less than 8 points less likely to work after marriage than percent of the average income of beneficiaries before (Solotaroff et al. 2019). Women who have living in extreme poverty (Ali 2014). The never been married are 35 percentage points DA, which provides monthly transfers of Tk more likely to work than married women, and 750 (US$7.50) to people with disabilities, is mothers with children under the age of five insufficient to cover basic needs. In FY2020, are 15 percent less likely to engage in the labor the government’s Coordination Committee on force than women with no children (Kotikula, Safety Nets increased the coverage of the DA Hill, and Raza 2019). Kotikula, Hill, and Raza by making it a universal safety net. However, attribute the low labor force participation to there was no increase in the transfer amount. lack of childcare options, low mobility (because Estimates show that redistribution of benefits of the lack of safe transportation options), and from people in the top 80 percent of the restrictive gender norms. welfare distribution to people in the bottom 20 would reduce extreme poverty from 22 percent Widows, people with disabilities, and young to 4 percent (Khondker and Jalal 2019). Only mothers are covered by a few cash transfer 1.6 percent of social protection expenditure is programs, but the level of support is often too allocated to children under five, who represent low to transform their economic conditions or 9 percent of the total population and 13 percent improve their productivity and employability. of the poor population. Programs such as the Between FY2013/14 and FY2017/18, the Maternity Allowance, the Allowance for Urban government spent Tk 1,500 billion (US$15 Lactating Mothers, Shombhob, and ISPP have billion) on social protection programs, most of promoted maternal and child health, but they which was allocated to cash or food transfers have had a limited impact on the economic for seniors (World Bank 2021b). empowerment of young mothers. Table 2.1 Overview of Bangladesh’s Widowed, Deserted, and Destitute Women Allowance (WA), Disability Allowance (DA), and Income Support Program for the Poorest (ISPP) programs Item WA (1998-Present) DA (2005-Present) ISPP (2015-22) Implementing Department of Social Services, Department of Social Services, Local Government Division, Agency Ministry of Social Welfare Ministry of Social Welfare Ministry of Local Government, Rural Development and Cooperatives • Promote socioeconomic • Promote socioeconomic • Increase mothers’ use of development development child nutrition and cognitive • Improve widows' status in • Ensure inclusion in social development services the family and society protection programs • Enhance local capacity to • Enhance morale • Comply with legal and deliver safety nets Objectives • Improve nutrition and health constitutional commitments status related to disabilities • Incorporate issues related to people with disabilities in the national workplan The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 12 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries Potential Target Help Improve and Capacity to Move Up the Groups Livelihoods Barriers Ladder Table 2.1 continued Item WA (1998-Present) DA (2005-Present) ISPP (2015-22) 2.5 million widows (2022–23) 2.4 million people with 600,000 pregnant women and Eligibility criteria: disabilities (2022–23) mothers with children under five • Age: 18+ Eligibility criteria: Eligibility criteria: • Annual income: Less than Tk • Registered as a person • Poor based on criteria 12,000 (US$112) with a disability under the related to land ownership, • Priority to people who People with Disabilities and income source, annual have no family support, are Protection Act 2013 household income (less unable to work because of • Age: 6+ than Tk 10,000 [US$100]), illness, or are landless • Annual income less than Tk housing conditions, and Target Group 36,000 (US$360) ownership of durable assets • Prioritization of seniors, • Household with a pregnant people with multiple woman and/or at least one disabilities, children with child under the age of four intellectual disabilities, women, landless people, and people living in remote areas Tk 700–Tk 1,500 (US$7–US$15), conditional upon fulfilling co-responsibilities, including completing antenatal care Transfer Amount Tk 500 (US$5) per month Tk 750 (US$7.5) per month visits, monitoring the growth of children, and attending child nutrition and development counseling sessions. Sources: Ministry of Social Welfare 2022; Ministry of Finance 2022; and World Bank 2021b. Many households with widows, people with coverage under labor market programs, such disabilities, and young mothers lack access to as microfinance. Only 13 percent of households finance and other services that can support headed by widows reported receiving their livelihoods. Many of these households microcredit, far fewer than the 30 percent of (especially in the poorest wealth quintile) households nationally (figure 2.1, panel a). The receive some form of social assistance, either share of households with at least one working- food or cash transfers; they receive less age member with a disability and households Figure 2.1 Microcredit and social assistance coverage, by wealth quintile Microcredit 2.1a 2.1b Social assistance a. Microcredit b. Social assistance 45 45 38 45 41 40 40 38 38 34 34 34 33 34 40 35 35 32 31 34 34 32 34 33 34 of population 30 35 35 32 31 31 29 30 Percent of population 30 of population 30 30 26 25 25 23 25 25 21 19 20 20 20 17 15 15 15 13 13 15 Percent 10 15 10 10 Percent 10 10 5 5 5 0 0 0 Q1 Q2 Full sample Q1 Q1 Q2 Q2 Full sample Full sample Household headed by a widow Household headed by a widow Household with working age (15-64) person with disability Household with working age (15-64) person with disability Household with children under two Household with children under two All households All households The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 13 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries Potential Target Help Improve and Capacity to Move Up the Groups Livelihoods Barriers Ladder with at least one child below the age of two part of a group that promoted peer support receiving microcredit is higher, at 31 percent also made women feel more included and and 34 percent, respectively, but still low. empowered in their communities. Even in the bottom wealth quintile, just 23–41 percent of vulnerable groups receive social Economic inclusion programs have lifted people assistance (figure 2.1, panel b). with disabilities out of poverty and reduced the social discrimination they face. In Bangladesh, Evidence from economic inclusion programs in Humanity and Inclusion is implementing other countries suggests positive economic and the third phase of a disability-inclusive social impacts on widows. The Amal program graduation model that was initially funded in Egypt targets disadvantaged widows and by the UK Department for International female-headed households in rural Minya, Development (DFID) and the Stimulating providing them with vocational and business Household Improvements Resulting in skills training, microcredit, and support to Economic Empowerment (SHIREE) program launch microenterprises. By the end of the in 2011–14. The program provides consumption program, monthly income of beneficiaries support, asset transfers, savings support, had risen 48 percent and monthly savings had skills training, and coaching to people with tripled (Ibrahim 2016). The evaluation reports disabilities. Beneficiaries also receive access to positive social outcomes, such as increased rehabilitation and adaptive tools to improve sense of independence, a positive vision for the their productivity. Ninety-eight percent of future, and improved community relations. beneficiaries graduated from extreme poor to poor status through increased income (Vijghen In Tamil Nadu, India, a local NGO (Kalangarai) 2018). Beneficiaries were able to build resilience launched a program that included self-help to shocks by diversifying their income source groups and microcredit for widows. The goal and multiplying their assets. The majority (96 was to help them build sustainable livelihoods percent) of beneficiaries reported increased through activities such as managing livestock, self-esteem, as measured by the ability to solve operating a food stall, and cultivating problems, engage community members, access vegetables. An evaluation of the program basic services and employment opportunities, indicates that beneficiaries experienced and support their families. improved economic conditions and greater social inclusion (Lombe et al. 2012). Being The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 14 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Profiles of Potential Economic Inclusion Target Groups A profiling survey was conducted on a random sample of beneficiaries from each program; for comparison purposes, a sample of nonbeneficiaries from the same upazilas (subdistricts) was also surveyed. The survey collected information on household socioeconomic and demographic characteristics; access to services; and perceptions, attitudes, and views on potential opportunities to improve respondents’ conditions. This granular level of information on and the majority of dependents between the beneficiaries is typically not included in ages of 6 and 14 in these households attend nationally representative household surveys. school. The average household size is 3.62 The survey thus provides a unique opportunity members for WA households, 4.60 members to identify the constraints facing the most for DA households, and 4.36 members for vulnerable segments of the population in ISPP households. In comparison, the average Bangladesh and opportunities for and pathways household size in Bangladesh is 4.06 members to sustainable livelihoods and gradually exit (according to the HIES 2016–17). from SSN programs. Box 3.1 describes the survey sampling methodology and location of On average, beneficiary households have respondents. one member in paid employment, but labor income forms less than a fifth of monthly On average, SSN beneficiaries live in household income (figure 3.3). Only a small households with high dependency ratios. proportion of households has two or more A large share of households have at least members engaged in paid employment (figure one member who falls outside of working 3.2). As wage income alone is not sufficient to age (15–64). By definition, all sampled ISPP cover all household expenditures, households households have dependents, as the program tap other sources of income (figure 3.3). targets low-income families with pregnant Wage income accounts for 14 percent of women and mothers with young children. total household income for WA beneficiary About 73 percent of DA households and 69 households and 13 percent for DA households. percent of WA household have a dependent The majority of nonwage income appears to in the household. Most households have more come from loans (30 percent for WA and 24 young dependents than older dependents, percent for DA households), and international The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 15 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Box 3.1 Quantitative survey sampling methodology Bangladesh has 8 divisions, which are divided into 64 districts, which are subdivided into 492 subdistricts or upazilas. WA and DA beneficiaries (who fall between the ages of 18 and 50) were randomly sampled from the list of beneficiaries located in three divisions: Dhaka, Khulna, and Rajshahi. Random sampling was done at the level of upazilas within each district, with a target of 200 WA and DA beneficiaries each per district. WA and DA beneficiaries were randomly sampled from 12 upazilas in Kishoregonj, 7 in Manikganj, 5 in Rajbari, 4 in Go- palganj, 1 in Khulna, and 1 in Natore. In total, data were collected from roughly 2,400 WA and DA beneficiary households. ISPP beneficiaries (who fall between the ages of 18 and 50) were randomly sampled in the Rangpur and Mymensingh divisions. Beneficiaries were randomly sampled from four upazilas in Mymensingh and two in Rangpur. In total, data were collected from 2,500 ISPP beneficiary households. Most sampling locations were selected for a specific purpose. For example, the team sought to select a mix of areas that are rural and urban, physically contiguous, have high poverty rates, are close to Dhaka, and are far from Dhaka. A sample representing the general population was drawn from the same upazilas in which WA and DA bene- ficiaries are located, in order to establish a comparison group against which to measure outcomes (box table 3.1.1). Two hundred households were randomly sampled per district. Population-based probability-proportion- al-to-size (PPS) sampling (using the Bangladeshi census) was used to sample nonbeneficiary households across upazilas within each district in which WA and DA beneficiary households were sampled with the exception of Khulna and Natore, where only one upazila was selected from each program. In total, 1,200 households were sampled from 120 sampling clusters, using the random walk approach. Sampled households were selected to be interviewed on the condition that there was least one adult (18+) member in the household and that no one from the household was receiving either WA or DA support. (These nonbeneficiary households were also not benefiting from ISPP, given that they live outside the implementation locations.) Box Table 3.1.1 Description of sample of beneficiary and nonbeneficiary households, by division and district Number of Beneficiary Households Division District Widowed, Disability Income Support Number of Deserted, and Allowance (DA) Program for the nonbeneficiary Destitute Women Poorest (ISPP) households Allowance (WA) Gopalganj 200 200 0 200 Kishoreganj 204 200 0 200 Dhaka Manikganj 206 206 0 200 Rajbari 204 204 0 200 Khulna Khulna 200 203 0 200 Rajshahi Natore 203 200 0 200 TOTAL 1,242 1,218 0 1,200 Mymensingh Mymensingh 0 0 1,700 0 Rangpur Kurigram 0 0 800 0 TOTAL 0 0 2,500 0 Sources: Alaref, Azam, and Saha 2023. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 16 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Figure 3.1 Distribution of social safety net beneficiary households, by wealth quintile 40 100 35 90 80 Percent of population 30 70 25 60 20 50 15 40 30 10 20 5 10 0 0 Q1 Q2 Q3 Q4 Q5 WA ISPP Nonbeneficiary DA Note: The cut-off points for the five wealth quintiles are based on the wealth distribution of nonbeneficiary households (as proxied by owned assets). Sample sizes: WA = 1,242, DA = 1,219, ISPP = 2,500, nonbeneficiary households = 1,200. remittances. At 17 percent, the share of for WA and DA; the figure is higher for ISPP wage income is slightly higher among ISPP beneficiaries (16 percent). beneficiary households, but their main sources of income are international remittances, The largest group of working-age members savings, and the sale of assets. Safety net of SSN households (about a quarter) is transfers from either the government or involved in either unpaid family work on a nongovernmental organizations (NGOs) family business or farm or household work. make up just 3 percent of household income The second-largest share is wage employment Figure 3.2 Shares of households receiving social safety net support that are in paid employment 80 73 70 Percentage of population 60 56 55 50 40 30 20 20 14 12 10 0 WA households DA households ISPP households At least one member has paid employment At least two or more members have paid employment The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 17 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Figure 3.3 Sources of income of households receiving social safety net support 30000 35 30 25000 Average monthly amount (BDT) Percent of household income 25 20000 20 15000 15 10000 10 5000 5 0 0 WA DA ISPP WA DA ISPP WA DA ISPP WA DA ISPP WA DA ISPP WA DA ISPP WA DA ISPP Wage income International Domestic Transfers from Safety nets Savings and Loans remittances remittances family or friends (government or assets NGO) Source of income Note: Figures are reported only for households that reported receiving income for each source. Sample sizes: WA = 1,242; DA = 1,218; ISPP = 2,500. Figure 3.4 Work and study activities of household members receiving social 30 safety net support 25 25 24 23 21 21 Percent of population 20 18 15 11 10 10 10 10 8 8 7 7 6 5 3 3 2 2 1 1 1 1 0 Unpaid family Wage employment Household work Self-employment Not working due Student Not working & not Self-employment work (hired workers) to disability looking for work (no hired workers) WA DA ISPP Note: Sample sizes: WA = 1,231; DA = 1,213; and ISPP = 2,500. (18–23 percent). The share of households More than half of households across the in unpaid family work is larger in WA (25 three program types reported experiencing percent) and DA (24 percent) households than a shock in the last year. The three most in ISPP households (10 percent) (figure 3.4). frequently experienced shocks were health In contrast, the share of households engaged shocks, inability to meet monthly financial in household is larger in ISPP households (21 obligations, and damage to household assets percent) than in WA (8 percent) and DA (7 (figure 3.5). Other reasons reported included percent) households. nature disasters, accidents, theft, and lawsuits. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 18 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Figure 3.5 Share of social safety net beneficiaries facing a shock in previous 12 months 10 WA Percent of population 11 39 10 DA 15 46 13 ISPP 5 45 0 10 20 30 40 50 Damage to household assets Inability to meet monthly fi nancial obligations (e.g. debt, mortgages) Health shock Figure 3.6 Work and education status of head of households receiving social safety net support a. Work status b. Education status 4% WA 39% 19% 24% 14% 5% DA 33% 23% 21% 17% 2% ISPP 64% 16% 8% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of household heads Wage worker/employee Own economic activity without hired labor Own economic activity with hired labor / employer Unpaid worker in family business/ farm Other Not working Note: Sample sizes: WA = 1,242; DA = 1,218; ISPP = 2,500. Figure 3.7 Education status of social safety net beneficiaries 15% WA 72% 13% 0% 16% DA 59% 22% 3% 8% ISPP 7% 74% 11% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of households No education Some education but less than primary Primary but less than higher secondary Higher-secondary or more Note: Sample sizes: WA = 1,233; DA = 1,166; ISPP = 2,468. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 19 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder VARIATION IN OUTCOMES AMONG ISPP beneficiaries have more years of SOCIAL SAFETY NET BENEFICIARIES education than other SSN beneficiaries. Among all ISPP beneficiaries, 93 percent Sixty-four percent of ISPP household heads report the ability to read and write in one are salaried workers (figure 3.6, panel a). On language, far more than the 18 percent average, they have more years of education of WA beneficiaries and 31 percent of than heads of households receiving other SSN DA beneficiaries. Three-quarters of ISPP support (figure 3.6, panel b). They are also beneficiaries completed primary school younger, as they include young families who and have some secondary education but did receive cash benefits for children.3 not complete higher-secondary education Figure 3.8 Reasons social safety net recipients report for not attending school 70 63 60 56 57 55 51 50 Percent of households 40 30 28 25 23 20 19 20 18 14 9 9 10 6 6 5 1 1 2 2 0 WA DA ISPP Parents/elders did not let me No money for fees/uniform/books Had to earn an income Childcare and household responsibilities Illness Disability Other (lack of safety, distance, confli ct with beliefs, poor quality) Note: Sample sizes: WA = 788; DA = 561; ISPP = 171. Figure 3.9 Scores of male and female social safety net recipients on the Big Five personality traits 3.5 1.4 3.0 1.2 2.5 1 2.0 0.8 1.5 0.6 1.0 0.4 0.5 0.2 0.0 0 Grit Grit Decision making Decision making Time preference Conscientiousness Conscientiousness Extraversion Extraversion Agreebleness Agreebleness Openness Openness Hostile attribution bias Hostile attribution bias Risk aversion Risk aversion Time preference Emotional Stability Emotional Stability Men Women DA WA ISPP Note: Higher scores correspondent to higher individual traits. Sample sizes: WA = 1,242 individuals; DA = 1,218 individuals; ISPP = 2,500 individuals. Appendix B shows the questions for each measure. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 20 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder (figure 3.7). In comparison, 72 percent of conscientiousness, extraversion, agreeableness, WA beneficiaries and 59 percent of DA and emotional stability) correlate with beneficiaries have no education. Very few earnings, employment, and other labor beneficiaries of any of these programs attend market outcomes. Emotional stability and vocational institutions. conscientiousness, in particular, are strong predictors of job performance and wages Among WA beneficiaries who never attended (Macours, Laaja, and Hernández 2019). school, 56 percent cite lack of permission from parents or elders as the main reason Growing evidence suggests that these for not doing so (figure 3.8). Among DA skills also affect labor market outcomes beneficiaries, 57 cite having a disability. in Bangladesh.4 Emotional stability has a Among ISPP beneficiaries, 63 percent cite consistently positive correlation with wages lack of money for tuition fees, uniforms, or (Nomura and Adhikari 2017). Female workers books. who are better at adapting to changes or are self-disciplined are more likely to engage ISPP beneficiaries score higher than WA in wage employment (Kotikula, Hill, and and DA beneficiaries on assessments of Raza 2019). Women who are persistent and noncognitive socio-emotional skills associated persevere through challenges are more likely with employability (figure 3.9). Empirical to be self-employed (Kotikula, Hill, and Raza evidence from high-income countries shows 2019). that the Big Five personality traits (openness, Figure 3.10 Level of difficulty across four measures of functional disability self-care (e.g.,washing or communicating in your WA 86% 10% 2%1% Do you have difficulty with Do you have difficulty native language? DA 55% 17% 15% 13% ISPP 99% 0% 1% WA 76% 16% 6% 2% dressing)? DA 56% 20% 14% 10% ISPP 97% 2% 0% WA 47% 40% 12% 1% Do you have difficulty remembering or concentrating? DA 41% 28% 20% 10% ISPP 85% 14% 0% 1% walking or climbing steps? WA 33% 39% 26% 2% Do you have difficulty DA 33% 25% 34% 9% ISPP 87% 11% 2% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of beneficiaries f ficulty No diISPP Note: Sample sizes: WA = 1,242; DA = 1,218; = 2,500.Some difficulty A lot of difficulty C annot do at all The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 21 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Around 41 percent of WA and DA beneficiaries, but only 30 percent are engaged beneficiaries report having illnesses that in paid employment, and most of these prevent them from working; among women perform household or agricultural ISPP beneficiaries the figure is 15 percent. sector work. Paid employment is much During the last reported four weeks, WA more prevalent among WA beneficiaries and DA beneficiaries could not carry out (60 percent) and DA beneficiaries (54 their usual activities for an average of eight percent); more than half of WA and DA and nine days, respectively. The average perform subsistence work (either solely or for ISPP beneficiaries was six days. More in conjunction with paid work) (figure 3.11). than 10 percent of DA respondents report Most ISPP recipients who work (for pay or that they face difficulties performing or not) are self-employed, with a larger share cannot perform an activity at all across four working as family helpers, usually part- functional activities (figure 3.10). Over 80 time (figure 3.12). The average number of percent of ISPP beneficiaries report having weekly hours worked is 28 hours for WA no difficulties performing these activities. beneficiaries, 33 hours for DA beneficiaries, 30 percent of DA beneficiaries reported and 22 hours for ISPP beneficiaries. feeling that employers are unwilling to hire people with disabilities and that workers are Most WA and DA beneficiaries work in low- unwilling to work with them. This belief is quality, often precarious conditions, usually stronger among WA and DA beneficiaries in small (two- to four-person) informal than ISPP beneficiaries. home-based enterprises in the agricultural sector (figure 3.12). They rely on daily pay ISPP beneficiaries have better health and and receive no employment benefits. The education outcomes than female WA and DA average weekly income for WA and DA Figure 3.11 Work status of social safety net beneficiaries in last seven days 70 64 60 60 54 Percent of households 50 49 50 40 30 30 20 10 0 WA DA ISPP Engaged in paid employment in last seven days Worked for at least one hour t o produce for own household Note: Sample sizes: WA = 1,242; DA = 1,218; ISPP = 2,500. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 22 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Figure 3.12 Type of work performed by social safety net recipients 29 WA 46 12 3 9 11 0 26 DA 48 16 4 0 2 21 33 ISPP 56 2 7 0 1 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percentage of households Self-employed Family helper Day laborer Employee Domestic worker Intern Employer (self-employed with paid employee) Other Note: Sample sizes: WA = 900; DA = 744; ISPP = 1,306. Figure 3.13 Family support of and constraints to working among ISPP beneficiaries 3.13a Degree of family support a. Degree of family support b. Constraints 3% 3% Childcare 5% 27% Household responsibilities 37% Illness, injury, disability Permission from husband or father 30% 56% Other Not int erested to work 36% Permission from in-law 60 Very supportive Somewhat supportive Not supportive Note: Sample size: 1,263 beneficiaries was Tk 1,870 (US$18) and Tk 64 percent of ISPP, 25 percent of WA, and 16 3,663 (US$35), respectively. The small group percent of DA beneficiaries are paid monthly. of ISPP beneficiaries who work for pay are engaged in better-quality jobs. Their average Over 72 percent of ISPP beneficiaries believe monthly income was Tk 5,070 (US$48). The their families would be somewhat or very share of people working for pay who have supportive if they decided to work; 86 percent written contracts was 39 percent among ISPP reported being constrained by childcare beneficiaries and 5 percent of WA and DA responsibilities (56 percent) and household beneficiaries. Among people working for pay, work (30 percent) (figure 3.13). When asked The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 23 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Figure 3.14 Sector and job preferences cited by ISPP beneficiaries a. Sector preference for training b. Job preference 1% 1% Handicraft s 1% Government service 3% Readymade garments 4% 4% 3% Private service 4% Handicraft s 8% Business 5% Computer 40% Other 38% Poultry 9% 8% Agriculture crop production Ready-made garments Non-crop agriculture Maid 10% Health services Agricultural activities 16% Offi ce management 11% Not working (e.g. due to Beautician/hairdresser 13% disability) Day labor/Construction 21% Other Student Note: Sample sizes: Panel a: 1,800; panel b: 2,499. about the enabling environment that could allow them to purse their dream job, 58 In contrast, WA and DA beneficiaries percent cited the need for higher qualifications reported limited interest in looking for and skills training, 28 percent cited the additional work or training. Over 85 percent need for support to find appropriate jobs, of DA beneficiaries cited illness, injury, or and 24 percent cited the need for suitable disability as the main reason for not being transportation to and from the workplace. able to work, and over 80 percent of WA Three-quarters (76 percent) of ISPP beneficiaries cited disability and old age beneficiaries cited interest in training (figure 3.15). Perception of family support opportunities. Training in ready-made of their working were also lower, with 78 garments (38 percent) and handicrafts (21 percent of WA beneficiaries and 53 percent of percent) would allow them to operate a small DA beneficiaries indicating that their families business from their home (figure 3.14, panel would not be supportive of their looking for a). Forty percent of beneficiaries reported an additional work. interest in working in the handicrafts sector. Government service was the second-most Much has been written about the worsening cited type of job (13 percent) (figure 3.14, psychological well-being and depressive panel b). symptoms of the poor and its implications Figure 3.15 Constraints to finding additional work cited by WA and DA beneficiaries 3%0% 2%2%2% 7% 2% 6% Illness, injury, disability 7% Illness, injury, disability Other Retired, too old for work Retired, too old for work 46% Not interested to work WA DA School/training Housework Housework Other Not interested to work 36% Too young School/training 86% Husband/father’s permission Note: Sample sizes: Panel a: 1,800; panel b: 2,499. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 24 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Figure 3.16 Self-reported measures of psychological well-being and life satisfaction among social safety net beneficiaries 3.16a Self-report of life satisfaction a. Self-report of well-being b. Self-report of life satisfaction 3.16a Self-report of well-being 30 100 90 25 Percent of beneficiaries Percent of beneficiaries 80 70 20 60 50 15 40 30 10 20 10 0 5 concentrating on what you… Did you feel that everything you Did you feel like not getting up in Were you happy? Was your sleep restless? Did you feel depressed? Did you feel lonely? Were you disturbed by things that Did you feel afraid? Were you hopeful about the 0 Did you have trouble don’t normally bother you? 1 2 3 4 5 6 7 8 9 10 did was a burden? WA DA ISPP the morning? future? Low Note: Sample sizes: WA = psychological 1,242; well-being DA = 1,218; High Lowest = 0, Highest = 10. ISPP = 2,500. In panel b, Score: psychological well-being on employability andDA WA economic ISPP reintegration panel a). ISPP beneficiaries are more likely to prospects (Haushofer 2019). WA and DA feel hopeful about the future and to report beneficiaries are more likely than ISPP happiness and life satisfaction (figure 3.16, beneficiaries to report feeling disturbed, to panel b). have trouble concentrating, to feel depressed, to feel everything is a burden, to feel afraid, Young WA beneficiaries have stronger human to have restless sleep, to feel lonely, and to feel capital outcomes and face fewer constraints to like not getting up in the morning (figure 3.16, boosting their livelihoods than the average WA Figure 3.17 Scores of WA beneficiaries on Big Five personality traits, by age range 3.5 3.0 2.5 2.0 Score 1.5 1.0 0.5 0.0 ri t e g ss on ss s as n y es c in lit io ne G ne en bi i ak nn rs bi rs le us er ve n ta ve m pe eb io ef io ra lS ka n t O nt pr re t bu io na Ex s ie Ag is e Ri tri io c ec m at ns ot Ti D co Em ile st Ho Age <35 Age 36-45 Total Note: Sample size: 1,242. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 25 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder beneficiary.5 For example, 54 percent of WA DIFFERENCES IN HUMAN beneficiaries below the age of 35 and 43 percent DEVELOPMENT OUTCOMES of beneficiaries 36–45 report knowing how to BETWEEN BENEFICIARIES AND read and write—about twice the 18 percent for NONBENEFICIARIES the average WA beneficiary. An ordinary least squares (OLS) estimator Young WA beneficiaries also report higher combined with a propensity score matching scores on some of the socio-emotional skills (PSM) technique was used to examine how that correlate with employability, such as beneficiary households fare compared with conscientiousness (figure 3.17). The average WA other households in the same upazila that beneficiary reports being unable to carry out did not receive any social assistance. First, her usual activities for 8.46 days out of the past an OLS equation was estimated on each four weeks; beneficiaries under the age of 35 and outcome of interest while controlling for 36–45 report lower rates (6.67 and 6.05 days, participation in each SSN program as well respectively). A larger share of younger WA as other variables, including household beneficiaries were engaged in paid employment demographics, education, occupation profile, in the last seven days compared with the average and assets. A PSM approach was then used WA beneficiary (73 percent for those below that compares nonbeneficiary households the age of 35 and 36–45 and 60 percent for the with similar estimated propensity to receive average beneficiary). Younger WA beneficiaries benefits as beneficiary households. Box 3.2 also appear to have slightly higher aspirations describes the methodology. Appendix A for their future and a more positive outlook presents the full results. on life than the average WA beneficiary (figure 3.18). ISPP beneficiary households are more likely to report better outcomes than Figure 3.18 Measures of life satisfaction among WA beneficiaries, by age range 30 25 Percent of beneficiaries 20 15 10 5 0 1 2 3 4 5 6 7 8 9 10 Score Total Age <35 Age 36-45 Note: Sample size: 1,242. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 26 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder nonbeneficiaries along several dimensions benefits from participation in the ISPP related to children’s schooling, employment program: They are more likely to feel hopeful of male members, and mothers’ psychological about the future and to report higher degrees well-being. They are also more likely to earn of happiness and life satisfaction (figure 3.19, wage income and have higher wage income. panel a). Participation in ISPP may have However, women in ISPP households improved both economic and noneconomic are 14 percent less likely than women outcomes for households. The objectives in nonbeneficiary households to be in of the program did not include improving employment (unsurprisingly, given that they women’s labor market outcomes; for this are 7–8 percent more likely to have children reason, the program did not offer support 6–14 attending school). Young mothers report services to tackle childcare constraints. Box 3.2 Propensity score matching methodology We estimated the following equation on a pooled sample of WA, DA, and ISPP beneficiaries and a sample of nonbeneficiary households: y =α WA +α DA +α ISPP +x ^,γ+ϵ (3.1) i wa i da i ispp i i i where y is the outcome variable for household i; x is a vector of controls; and WA ,DA , and ISPP are indica- i i i i i tors that take a value 1 if the household is beneficiary of WA, DA, or ISPP. The omitted group is the general population, hence, the parameters α ,α ,or α capture the difference between each program's bene- wa da ispp ficiaries and the general population (nonbeneficiaries). x contains a large set of variables, including include i household demographics, education, occupation profile, and assets. The parametric estimator (OLS) described above requires one to specify a functional form for the outcome equation as well as distributions for the error terms. We also use a semi-nonparametric propensity score method (PSM) to relax these assumptions. PSM is arguably an improvement over OLS, because it avoids extrapolation into areas of the causal effect distribution that is not on the common support. Analyses based on PSM rely on the assumption of selection on observables: Conditional on observable characteristics, households receiving different benefit do not systematically differ from nonbeneficiary households along unobservable dimensions. This approach compares nonbeneficiary households who have similar estimated propensities to receive benefits as beneficiary households. For PSM estimation, we first use a probit model to estimate the probability of being in a program: Prob(P =1)= Φ(Z^' β). (3.2) i This model is estimated separately for each of beneficiary group (P =1) and nonbeneficiary households i (P =0). This propensity score is used to find a match between the treated households (beneficiary house- i holds) and a set of nonbeneficiary households that is observationally similar. We employ kernel matching with overlap imposed. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 27 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Figure 3.19 Difference 3.19a in human development Income outcomes Support Program in social for safety net the Poorest beneficiaries and nonbeneficiaries (ISPP) a. Income Support Program for the Poorest 1.751.74 (ISPP) 1.80 1.30 Probability 0.80 0.30 0.18 0.070.08 0.04 0.09 0.060.06 0.03 -0.20 -0.14 -0.70 Child (age 6- Houeshold Houeshold Hopeful Satisfied with Female Male working- 14) attending earne d earne d about future life working-age age members school income income (log) members working working Income Support 3.19a Program OLS PSM for the Poorest (ISPP) b. Widowed, Deserted, and Destitute Women Allowance (WA) 1.80 1.751.74 1.30 Probability 0.80 0.30 0.18 0.070.08 0.04 0.09 0.060.06 0.03 -0.20 -0.14 -0.70 Child (age 6- Houeshold Houeshold Hopeful Satisfied with Female Male working- 14) attending earne d earne d about future life working-age age members school income income (log) members working working 3.19c Disability Allowance OLS PSM (DA) c. Disability Allowance (DA) 0.20 0.06 0.07 0.05 0.00 -0.05 -0.20 -0.13 -0.17 Probability -0.40 -0.60 -0.80 -1.00 -1.01 -1.05 -1.20 Hopeful about future Satisfied with life Coping mechanism: Coping mechanism: Coping mechanism: Reduced consumption Used savings/assets to Received gifts from to cope cope friends and family OLS PSM Note: Only statistically significant results are reported. Appendix B reports the full model. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 28 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder WA and DA beneficiary households are ISPP that incentivize families to use services less likely than nonbeneficiaries to report aimed at improving children’s nutrition and improved outcomes related to employment, cognitive development, can build human psychological well-being, and children’s capital. The ISPP program also included schooling; they do report a higher probability a counseling intervention. In addition to of adopting improved coping mechanisms informing beneficiaries of the importance of when faced with shocks. WA beneficiary early childhood development and engaging households are dependent on gifts from with their children, it may have contributed friends and family as a coping mechanism to women’s social capital and well-being. (figure 3.19, panel b). They have weak human capital and employment outcomes, reporting International evidence—most notably from lower earned wage income on average than the Oportunidades programs in Mexico nonbeneficiaries. DA beneficiary households and Bolsa Familia in Brazil—confirms the are less likely than nonbeneficiaries to reduce importance of cash-plus interventions consumption as a coping mechanism (figure in improving human capital outcomes. 3.19, panel c). When faced with a shock, they Oportunidades reduced the incidence are more likely to use savings, sell their assets, of low birthweight by 45 percent, infant or rely on gifts from friends and family. Both mortality by 17 percent, and the likelihood WA and DA beneficiaries are more likely of stunting and underweight prevalence by than nonbeneficiaries to report being less 5 percentage points (Cruz, de Moura, and hopeful about the future and less satisfied Neto 2017). Bolsa Familia led to a 26 percent with life. WA and DA programs may have decrease in the likelihood of being stunted helped smooth household consumption and and underweight. In Ethiopia, a nutrition- protect against shocks; they did not improve sensitive pilot integrated with the Productive their economic and productive potential. Safety Net Program provided households with cash transfers and set conditionalities, These findings highlight the importance of including regular antenatal care visits providing adequate cash benefits to meet a for pregnant women and immunizations household’s basic needs and combining them and growth monitoring for children. An with cash-plus interventions to support evaluation finds that dietary diversity human capital investments in children. increased by one food group, the likelihood of Government cash transfer programs make up children being breastfed after birth increased 16 percent of monthly income among ISPP by 9.3 percentage points, and attendance households (3 percent among WA and DA in antenatal care sessions rose 10 percent households) (see figure 3.3). Complementary (Gilligan et al. 2020). interventions, such as those introduced by The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 29 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Services That Can Help Social Safety Net Beneficiaries Improve Their Livelihoods This section discusses access to and provision of some of these services. It provides guidance on the design of an economic inclusion package based on the findings of the profiling survey and a service mapping exercise that includes interviews with service providers and beneficiaries to identify gaps in service provision. The section also draws on international on the objectives and methodologies used in experiences and findings from focus group the service mapping and market assessments. discussions and key informant interviews with Given the complexity of the barriers SSN community members and market actors to beneficiaries face, an integrated set of services identify suitable livelihoods and outline services is likely needed to improve their livelihoods. that could support beneficiaries in achieving Table 4.1 shows the critical and auxiliary their economic potential and improving their services that are needed, disaggregating them productive capacity. Appendix C provides details by avenue of livelihood strengthening. Table 4.1 Critical and auxiliary services that could be part of an integrated package of services Type of employment Critical services Auxiliary services • Credit and savings • Value chain linkage • Income-generating activity training • Business development • Mentorship/coaching Self • Agriculture and livestock extension • Job accommodation for people with disabilities • Skills/apprenticeship • Vocational skills • Job intermediation Wage • Job modification for people with disabilities • Financial literacy • Training on digital finance and soft skill • Psychosocial counselling • Microinsurance Self or wage • Health services • Safety and security • Childcare • Transportation Source: Development Research Initiative 2021. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 30 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder ACCESS TO AND QUALITY OF in the last year. Vocational training SERVICES opportunities require some formal education, are targeted toward youth, and Beneficiaries report challenges accessing the can be expensive, limiting the ability of following services: beneficiaries to participate. In addition, training is often inaccessible for pregnant • Health: Virtually all respondents (99 women, young mothers, and people with percent) have no health insurance. disabilities. Key informant interviews with training centers indicate some level of • Transportation: Over 55 percent of WA understanding on how to engage widows in and DA beneficiaries reported using local technical training. In contrast, informants buses. The share is much lower among ISPP lacked awareness of how to include people beneficiaries, which may reflect concerns with disabilities. Training on life skills that about safety and security. can complement technical training is even more limited, despite recognition that such • Financial literacy: Around 80 percent of training is critical for the success of social individuals reported not using a bank- safety net beneficiaries. related service in the last year, and around 70 percent have no access to the Internet. Over Good-quality and accessible childcare is an 90 percent of WA and DA beneficiaries important enabling factor for ISPP beneficiaries. but just 29 percent of ISPP beneficiaries Access is very limited, with 88 percent of reported using mobile banking. Training on beneficiaries looking after their children mobile financial services is limited, leaving themselves. Thirty percent of ISPP beneficiaries beneficiaries vulnerable to exploitation and cited household work as a major barrier to their fraud. economic inclusion. Pre-primary enrollment among children of ISPP beneficiaries is very low. • Access to credit: A majority of beneficiaries Just 31 percent of five-year-olds and 7 percent did not use microcredit services in the of three-year-olds receive early childhood last year (65 percent of WA, 54 percent of development services. In contrast, gross pre- DA, and 73 percent of ISPP beneficiaries). primary enrollment rate at the national level Limited access to credit is a significant is around 46 percent (World Bank 2020). The constraint to expanding livelihoods. WA and number of daycare centers in Bangladesh rose DA beneficiaries who received training in significantly in recent years, but most target areas such as sewing were unable to launch formal workers in urban areas. Informal workers their business because of lack of capital to are left without any reliable childcare support buy sewing machines and other materials. beyond a few government daycare centers in ISPP beneficiaries, many of whom work urban areas in Chittagong, Rajshahi, Khulna, in agriculture or with livestock, lack access Barisal, and Sylhet. In rural areas, where ISPP to loans to cope with income disrupted recipients live, daycare is very limited. by climate shocks and natural disasters. Institutions that provide microinsurance to Supply-side constraints in childcare relate to protect against the loss of livelihoods exist in insufficient numbers of service providers, lack Bangladesh, but they are often exclusionary of affordability, and poor quality. Demand- and require female beneficiaries to provide side constraints are driven mostly by limited male guarantors. information on external options and the benefits of childcare and concerns about quality. Good- • Training and job-related support: Just 2 quality childcare options are skewed to the rich, percent of ISPP beneficiaries reported despite a strong need among the urban poor received training (technical or nontechnical) (Rahman and Kamra 2022). Uptake among low- The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 31 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Figure 4.1 Features and concerns about childcare facilities cited by ISPP beneficiaries a. Features of childcare facilities 4.1b about childcare Concerns about b. Concerns childcarefacilities facilities 80 71 60 Percent of respondents 70 49 Percent of respondents 56 50 60 40 50 42 40 35 30 29 19 20 30 24 17 18 22 20 13 11 12 20 6 7 9 10 10 3 5 0 0 Low quality facilities No medical facilities No recreational facilities High costs for quality Lack of safety and security No safe drinking water Untrained staff Lack of flexibility No pickup and dropoff No educational facilities Educational facilities Medical facilities Cost Well-trained and caring Hygiene Distance from home Food facilities Infrastructure Time fl exibilities Recreational activities staff Note: Sample size: 2,499. income households is weak because of limited can also help identify more disadvantaged information about childcare options outside beneficiaries, which can help policy makers of the family and concerns about the quality direct more resources toward those in need. of childcare provided. Three-quarters of ISPP beneficiaries who look after their children noted Table 4.2 summarizes some general design that they choose to do so because it is good considerations for an integrated package of for child development. When asked about the economic inclusion services. The proposed important features of a childcare facility, they interventions for WA beneficiaries vary by age rated food and hygiene as the most important group, to account for differences in physical (figure 4.1, panel a). When asked about gaps in capabilities and aspirations. For example, asset childcare facilities, they cited lack of safety and transfer and light-touch mentorship are better security, medical facilities, and safe drinking suited to young WA beneficiaries, and high- water (figure 4.1, panel b). intensity mentorship is more appropriate for older beneficiaries, who tend to have lower These findings suggest the need to improve the aspirations and a negative outlook on life. provision and affordability of childcare services and to design policies that raise awareness about The core services of an integrated economic the benefits of childcare. Childcare facilities inclusion package typically include asset transfers, should also take into account mothers’ concerns life skills and business skills training, mentorship, about quality, in order to establish trust. and case management and counseling. These services are sequenced to maximize beneficiary ALIGNMENT OF PROGRAM DESIGN outcomes. The theory behind the economic WITH BENEFICIARY NEEDS, inclusion approach of BRAC’s UPG program and CAPABILITIES, AND ASPIRATIONS the 2006–14 CGAP–Ford Foundation Graduation pilots is that interventions have to be sequenced Economic inclusion programs need to be in a specific order to address constraints that tailored to address the unique and multifaceted beneficiaries face throughout a program cycle constraints, capabilities, and aspirations of (Montesquiou, Sheldon, and Hashemi 2018). each beneficiary group; their design should be Although some interventions varied, they informed by a profiling of beneficiaries. Profiling followed a similar sequence over an 18- to The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 32 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Table 4.2 Proposed interventions based on constraints facing each beneficiary group package of services Program Constraints Interventions • Beneficiaries rely on support from family For younger beneficiaries with high physical and friends when faced with shocks capabilities and aspirations: • Monthly revenue (primarily from • consumption stipend/cash transfer to meet basic remittances) is low and inconsistent needs • Beneficiaries lack skills in nonagricultural • asset transfers (agricultural livelihoods should be linked livelihoods with micro-insurance; nonagricultural livelihoods must • Beneficiaries have low aspirations and be accompanied by basic training) negative outlook on life • business skills training Widowed, • Beneficiaries have limited emotional • life skills training Deserted, stability and conscientiousness, which are • low-intensity mentorship with a focus on psychosocial and Destitute correlated with employability counseling Women • inkages to health and childcare services Allowance (WA) For older beneficiaries with low physical capabilities and aspirations: • consumption stipend/cash transfer to meet basic needs • life skills training • high-intensity mentorship with a focus on psychosocial counseling • linkages to health and childcare services • Beneficiaries are likely to sell assets and Interventions for younger beneficiaries with high physical rely on family support when faced with capabilities: shocks • consumption stipend/cash transfer to meet basic • Monthly revenue (primarily from needs remittances) is low and inconsistent • asset transfers (beneficiaries can be matched with • Beneficiaries are unable to find work livelihoods based on assessment of their functional because of social stigma about disability abilities using Washington Group on Disability statistics and lack of skills in nonagricultural or the World Health Organization Disability Assessment livelihoods Schedule 2.0 instrument) • Beneficiaries have low aspirations and • business skills training Disability negative outlook on life • life skills training Allowance • Beneficiaries have limited emotional • medium- to high-intensity mentorship (DA) stability and conscientiousness, which are • linkages to social care services correlated with employability Interventions for older beneficiaries with low physical capabilities and aspirations: • consumption stipend/cash transfer to meet basic needs • life skills training • high-intensity mentorship with a focus on psychosocial counseling • linkages to social care services • Monthly revenue (primarily from • asset transfer, with prioritization of nonagricultural remittances) is low and inconsistent livelihoods Income • Beneficiaries lack access to formal • business skills training Support jobs despite interest and high levels of • life skills training with a focus on women’s economic Program for education empowerment the Poorest • Female labor force participation is low • low-intensity mentorship Beneficiaries • Beneficiaries lack skills in nonagricultural • linkages to active labor market programs (ISPP) livelihoods • linkages to childcare services • Beneficiaries lack access to childcare Source: Development Research Initiative 2021. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 33 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder 24-month period, in which a consumption livestock rearing increased 21 percent and per stipend or cash transfer to allow beneficiaries capita consumption increased 11 percent. to meet their basic needs was followed by a significant grant to jumpstart an enterprise Localized market assessments identified several and technical and business skills training livelihood options that would be suitable for were provided to fill knowledge gaps. These WA, DA, and ISPP beneficiaries based on their interventions were combined with long-term interest, aspiration, and capability to engage in mentorship to influence behavior change and livelihoods, local market demand, profitability, mindsets. Most (84 percent) global economic and growth prospects. Findings from focus group inclusion programs continue to sequence discussions and key informant interviews with interventions in a set order based on the success community members (including beneficiaries) of the pilots (Andrews et al. 2021). Figure 4.2 and market actors indicate a strong preference illustrates the recommended sequence for for self-employment over wage employment, economic inclusion interventions. particularly among young mothers with a Figure 4.2 Recommended sequencing of economic inclusion interventions ASSET TRANSFER BUSINESS SKILLS TRAINING LIFE SKILLS TRAINING MENTORSHIP CASE MANAGEMENT | Referrals to services including disability-related social care services MONTHLY CASH TRANSFERS | Cash transfers of US$5-7.50 to WA and DA beneficiaries Timeline 18 - 24 months Asset Transfer high care burden and low access to childcare. A key feature of a successful economic inclusion Livestock-based options such as poultry-, cattle-, program is an asset transfer or grant that enables and goat-rearing were identified as profitable beneficiaries to increase their earnings and build options. They are labor intensive and require sustainable livelihoods. Cash transfers through physical space at the homestead, however, which safety nets enable beneficiaries to meet their can be challenging for WA and DA beneficiaries. basic needs, but they do not fulfill the long-term Moreover, lack of access to microinsurance limits objective of improving a household’s productive protection against disease and natural disasters. capacity and resilience to shocks. Nonagricultural livelihoods identified include BRAC’s UPG program increased participants’ handicrafts, tailoring, grocery shops, tea stalls, ability to shift from casual labor into livestock and stationery shops, which have consistent rearing as a result of a productive asset transfer demand year-round. These options would allow (Bandiera et al. 2017). This effect was evident four beneficiaries the flexibility to work near their years after the program began, with beneficiaries homes. Beneficiaries can easily master the basics working 26 percent fewer hours in domestic of handicrafts, tailoring, and business account services than the control group. Earnings from management. DA beneficiaries can be matched The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 34 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder with appropriate livelihoods based on their manner while enhancing financial literacy and functional abilities, using resources such as familiarity with digital cash transfers. the Washington Group on Disability Statistics or the World Health Organization Disability The government has already piloted the transfer Assessment Schedule 2.0 instrument. of allowances to WA and DA beneficiaries through a combination of government and The start-up capital for nonagricultural private digital financial service providers (Nagad, livelihoods in Bangladesh ranges between Tk bKash, SureCash, and Rocket). It will continue 20,000–55,000 (US$200–US$550), depending to strengthen its mechanisms as part of the on the type of livelihood and inputs required. medium-term priority under the NSSS (GED This range is in line with the value of productive 2020). Training on the use of mobile money will grants in successful economic inclusion help avoid exploitation, particularly for ISPP programs, such as BRAC’s UPG program (for beneficiaries, only 29 percent of whom use which grants were US$280–US$300), the Sahel mobile money. Adaptive Social Protection in Niger (grant value of US$321), and the HIAS Graduation Program Business Skills Training in Ecuador (grant value of US$421) (Andrews Integrating business skills training with et al. 2021; Bossuroy et al. 2021). The cost productive grants is critical for the sustainability depends on factors such as the inputs required, of livelihoods. Training on record-keeping, market access, transportation, and the level of inventory management, price setting, and profit competition. management is essential to maximize returns from livelihoods. Business skills training can The value of the asset transfer should ensure that address the knowledge gaps that 58 percent of beneficiaries can compete in local markets, build ISPP beneficiaries reported as being a significant viable livelihoods, and generate rapid returns. deterrent to engaging in nonagricultural Localized market assessments indicate that the enterprises. start-up capital required to launch a home-based tailoring business is around Tk 25,000 (US$250) Training is usually delivered at the start of (more if the beneficiary rents a shop). The start- an economic inclusion program, before the up capital is Tk 30,000 (US$300) for a home- transfer of a productive grant, in order to equip based grocery shop and Tk 50,000 (US$500) for beneficiaries with the skills needed to manage a shop in the market. To reduce costs and ensure a livelihood. The impact of combining training sustainability, the program can set up linkages with asset transfers is well-documented in between beneficiaries and preferred vendors for international programs, such as the Girinka raw materials and other livelihood inputs. program in Rwanda, where households that received livestock and training had higher A productive grant can be transferred through earnings, livestock productivity, and asset government-to-person (G2P) mechanisms accumulation than households that received only to enable beneficiaries to buy their assets an asset transfer (Andrews et al. 2021; Argent, directly from the market. Around 95 percent Augsburg, and Rasul 2014). In Sri Lanka, women of global economic inclusion programs provide entrepreneurs who received a combination cash transfers for beneficiaries to bypass the of an asset transfer and business training had logistical complexities associated with in- higher business ownership, profits, and capital kind transfers (Andrews et al. 2021). Cash stock than women who received the transfer or transfers provide beneficiaries the autonomy training as standalone interventions (Andrews et to engage with markets directly and build al. 2021; McKenzie, Mel, and Woodruff 2013). their negotiation and business skills. G2P mechanisms can facilitate the transfer of Training topics must be tailored to the productive grants to beneficiaries in a secure livelihoods selected by the beneficiary and The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 35 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder delivered by specialized trainers from the more effective than traditional entrepreneurship government, nongovernmental organizations training programs in increasing monthly profits. (NGOs), or the private sector through a It was particularly critical for women, who face combination of classroom instruction and unique constraints (Alibhai et al. 2019). practical demonstrations. The service mapping exercise identified over 500 training institutes Life skills training delivered in regular intervals affiliated with government ministries, such throughout the program cycle can address gaps as the Department of Women Affairs, that in noncognitive skills, which are prevalent provide training on tailoring, phone repair, among beneficiaries. ISPP beneficiaries reported and other trades to poor and vulnerable moderately high levels of emotional stability and women in Bangladesh. Vocational training conscientiousness; WA and DA beneficiaries lag institutes, which typically target people with in these skills. Life skills training that focuses higher levels of education, are suitable for ISPP on building confidence and self-esteem, setting beneficiaries, who are interested primarily in goals, and overcoming obstacles can address ready-made garment and handicrafts trade. some of these gaps and improve socioeconomic Institutes such as the KBCP Vocational Training, outcomes. Few institutes and trainers in Jubo Unnoyon Odhidoptor, and the Shakti Bangladesh can provide the necessary training Foundation can provide training on operating to beneficiaries, however; such training will computers and driving, which tend to be male- have to be delivered by program staff at group dominated activities. Partnerships with NGOs or individual meetings at regular intervals (bi- and the private sector will be instrumental in monthly or monthly), depending on needs. linking vulnerable beneficiaries with training opportunities that are often out of their reach Mentorship, Case Management, and Monitoring because of financial constraints or lack of Mentorship is critical in addressing the social awareness. and emotional constraints WA, DA, and ISPP beneficiaries face. It provides tailored Life Skills Training support intended to help beneficiaries Combining life skills training with business overcome barriers and strengthen their skills training and productive grants can confidence, self-esteem, and capacity to build increase the impact on beneficiaries. Life skills sustainable livelihoods and improve human include personal initiative skills that focus on development outcomes. Research shows that developing a mindset of self-starting behavior among female entrepreneurs, cash transfers and innovation, identifying and exploiting new combined with psychosocial interventions opportunities, setting goals, participating in such as mentorship and training, have greater planning and feedback cycles, and overcoming impacts on consumption, food security, profits, obstacles. A personal initiative mindset teaches and psychosocial well-being than standalone entrepreneurs to look for ways to make their cash grants (Bossuroy et al. 2021). During businesses stand out, overcome adversities and the COVID-19 pandemic, the mentorship setbacks, and plan the future of the business. In component of graduation programs was critical Togo, a World Bank–financed program targeting in encouraging beneficiaries to maintain a women-owned microenterprises tested the positive mindset and address growing concerns impact of personal initiative training relative to about gender-based violence (Schelzig and Jilani traditional business skills training that included 2021). financial management, marketing, and resource management. Profits increased by 30 percent Mentorship can be delivered by frontline staff among the first group and 11 percent in the and service providers from the government, second group (Campos et al. 2018). In Ethiopia, NGOs, and the private sector. WA and DA mindset-oriented entrepreneurship training beneficiaries, who are more likely than ISPP that focused on building personal initiative was beneficiaries to feel depressed and have The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 36 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder trouble focusing, will need regular and intense Regular monitoring allows staff to identify areas mentorship and psychosocial support through where beneficiaries need more support and frequent household visits by frontline staff. adjust the intensity of mentorship accordingly. Linkages to tele-counseling services from The use of a digital platform for monitoring can NGOs and the private sector such as Kaan facilitate real-time data analysis and streamline Pete Roi, Moner Bondhu, and Moner Daktar consolidation with national databases. can provide additional support. Sensitization and appropriate messaging will be needed The case management component includes from program staff to address the stigma setting up referrals or linkages with services around discussing mental health issues. As provided by the government, NGOs, and the ISPP beneficiaries report higher levels of private sector, based on beneficiary needs. happiness and life satisfaction than WA and Linkages to existing livelihood training DA beneficiaries, light-touch mentorship that programs, health services, disability care, focuses on livelihood guidance and parenting can and childcare services are needed to ensure be beneficial for them when they start managing the sustainability and scalability of an new livelihoods and childcare responsibilities. economic inclusion program. For WA and This type of support can be delivered through DA beneficiaries, most of whom cite illness monthly or quarterly household visits by or disability as major constraints to working, frontline staff. linkages to health and social care services will be critical. In addition to health services through Case management can complement mentorship the government’s upazila health complexes, by ensuring regular follow-up and monitoring services and livelihood initiatives from NGOs, of beneficiaries. Given the low levels of such as the Centre for Rehabilitation of the psychological wellbeing, case management Paralyzed, BRAC, and the Underprivileged can provide WA and DA beneficiaries with Children’s Education Program (UCEP) can be consistent and long-term support. Acting as leveraged. Linkages to childcare services, through case managers and mentors, frontline staff can NGOs and government providers, will be key monitor beneficiary performance along a set for ISPP beneficiaries, who identify childcare of economic and social indicators, such as food responsibilities as the main constraint to security, earnings, savings, and application of engaging in livelihoods. financial literacy and business skills training. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 37 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Overcoming Cost and Capacity Barriers to Implementation Implementing programs at scale is challenging. Globally, economic inclusion programs cost US$200 to almost US$900 per beneficiary (figure 5.1). The cash transfer, grant, or asset transfer represents a significant component of program costs. These high costs tend to severely limit the appetite of policy makers and potential implementers, especially given that the programs may need to operate at scale or risk being niche programs. Targeting is critical to controlling program will be able to take advantage of all the costs and ensuring impact. As the profiling services the government may offer; the design exercise revealed, all three beneficiary groups of the economic inclusion package should need support to help improve their resilience account for beneficiary capability, needs, and and livelihoods. The type of support may aspirations. For example, access to microcredit differ, however, depending on the profile of is beneficial for youth who have high potential each group. Not all cash transfer beneficiaries or experience with entrepreneurship, or Figure 5.1 Per capita costs and number of beneficiaries of economic inclusion programs in selected countries 1000 900,000 882 900 800,000 800 700,000 700 Number of beneficiaries 600,000 611 600 575 Unit cost (US$) 550 500,000 500 467 400,000 400 347 300,000 300 226 216 200,000 200 100 100,000 0 0 Zambia Rwanda India Bangladesh Pakistan India Ethiopia Malawi (SERP-AP) (BRAC) (Bandhan) Unit c o st Number of beneficiari es Sources: Andrews et al. 2021; Sengupta 2016; and IFAD 2017. Note: Program costs for all countries except Pakistan include the cash transfer amount; BRAC recently introduced a repayment component for the asset transfer. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 38 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder both, but face capital constraints. A study can potentially generate high returns in the comparing microcredit, in-kind grants, and long run. The absence of an exit strategy in cash grants in Upper Egypt finds that all three SSNs can lead households to remain on cash interventions led to significant increases in transfers indefinitely, burdening the social business profits and wage earnings for female protection system and preventing the intake entrepreneurs (Crepon, El Komi, and Osman of new beneficiaries. The WA has guidelines 2020). However, micro-loans, which cost just a for removing beneficiaries if there is an quarter to a third of grants, were more cost- improvement in financial condition, change effective in generating benefits such as total in marital status, coverage from other safety earned income. Entrepreneurs with business nets, relocation, or death. However, because experience and better financial standing were of a lack of enforcement and difficulties more likely than other beneficiaries to benefit with tracking and verification, beneficiaries from microcredit. A meta-study of Bosnia, are removed only in the event of death or Ethiopia, India, Mexico, Mongolia, Morocco, relocation (World Bank 2022). The scope and the Philippines indicates that microcredit for new intakes is further limited by poor benefits households with business experience targeting: 36 percent of WA beneficiaries (Meager 2019). In India, entrepreneurs with were found to be ineligible because they were business experience increased their assets by 35 divorced rather than widowed or not poor, or percent and doubled their revenues as a result both (World Bank 2022). of greater access to microcredit (Banerjee et al. 2019). The DA might not need an exit strategy, because of the permanent vulnerability of its Another important barrier to the roll-out and beneficiaries. The challenge facing this program scale-up of economic inclusion programs in is its inability to bring in new beneficiaries Bangladesh is institutional capacity. Economic because of budgetary constraints. A study inclusion programs provide combinations conducted in 2014 estimates that keeping of services. Most entities providing cash people with disabilities out of the labor force transfers or other SSN programs in costs Bangladesh 1.74 percent of GDP—US$1.18 Bangladesh specialize in the provision of single billion a year (Ali 2014). Other studies suggest interventions (for example, cash transfers that investing in early childhood development or training) and do not have the capacity to can generate a 17 percent rate of return (World provide a range of services. They need to rely Bank 2017). The rate of return on investment on other entities—other government agencies, human capital declines as a child gets older, NGOs, and the private sector—to provide indicating the importance of programs that such services. They will need to build capacity target the first 1,000 days (Heckman 2008). to link back-end management information systems of different programs to cross-verify eligibility and offer bundled services. These investments in capacity and program implementation may seem daunting, but they The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 39 Introduction Readiness of Profiles of Services That Can Overcoming Cost Conclusion Beneficiaries to Potential Target Help Improve and Capacity Move Up the Groups Livelihoods Barriers Ladder Conclusion Policy makers in Bangladesh need to ensure that the design of economic inclusion programs reflects the specific needs and capabilities of the intended beneficiaries. They also need to strengthen their capacity in three areas: 1. Increase the ability of field-level personnel 3. Better leverage national systems. The to coordinate and manage cases. For WA National Household Database, the G2P and DA, the DSS needs to increase the platform, the National ID, and other number of union social workers it has in national management information systems the field. provide a backbone of core national services that could be made interoperable 2. Build better coordination capacity for and used to coordinate services along the intra-agency cooperation, to be able to service delivery chain, from beneficiary cross-refer beneficiaries of one government identification and eligibility verification to program to services offered by another. payment. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 40 Appendixes The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 41 Appendix A Results of Ordinary Least Squares and Propensity Score Matching Models Ordinary Propensity Variable least squares score method Probability of child 6–4 attending school Widowed, Deserted, and Destitute Women Allowance (WA) 0.020 0.01817 Disability Allowance (DA) –0.028 –0.00818 Income Support Program for the Poorest (ISPP) 0.067* 0.079097* Probability of adult man working WA 0.047383* 0.029264 DA –0.00882 –0.02224 ISPP 0.034807* 0.018411 Probability of adult woman working WA –0.00847 0.013476 DA 0.00523 –0.0182 ISPP –0.01586 –0.13729* Probability of adult being in wage employment WA 0.002683 0.013921 DA –0.00609 –0.01169 ISPP –0.02711* 0.08027* Probability of adult being self-employed WA 0.00277 –0.01285 DA 0.007191 0.010856 ISPP 0.042415* –0.05322* Household has earned income (1/0) WA –0.00862 –0.04704* DA 0.006019 –0.0085 ISPP 0.043449* 0.039741 Household log(earned income) among households reporting earned income WA –0.15803* –0.3583* DA –0.19184* –0.22759* ISPP 0.088007* 0.176033* The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 42 Ordinary Propensity Variable least squares score method Respondent is hopeful about the future (1/0) WA –0.09631* –0.08061* DA –0.13155* –0.17022* ISPP 0.055407* 0.056921* Respondent is satisfied with life (1–10) WA –0.4745* –0.50882* DA –1.01042* –1.04959* ISPP 1.750639* 1.736905* COPING MECHANISMS Reduced consumption (1/0) WA –0.03631 –0.05251 DA –0.05259* –0.05221 Used savings/assets (1/0) WA 0.036 0.045505 DA 0.056* 0.065203* Received gifts from friends or family (1/0) WA 0.0498* 0.080547* DA 0.0455* 0.044188 Borrowed from friends or family (1/0) WA –0.025 –0.0531 DA 0.002 –0.01428 Borrowed from others (1/0) WA –0.0144 –0.05387 DA 0.0344 0.017326 Note: Each beneficiary household is matched to a nonbeneficiary household (the general population). In the OLS model, the nonbeneficiary popula- tion is the omitted group; the estimate indicators reveal the gap between beneficiary and nonbeneficiary population. As controls, both the OLS and PMS models used a large set of variables that include demographic, education, and occupational characteristics and household assets. In the PMS, kernel matching is used, and overlap imposed. * Significant at the 5 percent level. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 43 Appendix B Questions Asked to Identify Personality Traits of Beneficiaries Behavior and personal- Question ity trait Openness Do you come up with ideas other people haven't thought of before? Are you very interested in learning new things? Do you enjoy beautiful things, like nature, art, and music? When doing a task, are you very careful? Conscientiousness Do you prefer relaxation more than hard work? Do you work very well and quickly? Extraversion Are you talkative? Do you like to keep your opinions to yourself? Do you prefer to keep quiet when you have an opinion? Are you outgoing and sociable; for example, do you make friends very easily? Agreeableness Do you forgive other people easily? Are you very polite to other people? Are you generous to other people with your time or money? Emotional stability/ Are you relaxed during stressful situations? neuroticism Do you tend to worry? Do you get nervous easily? Grit Do you finish whatever you begin? Do you work very hard? For example, do you keep working when others stop to take a break? Do you enjoy working on things that take a very long time (at least several months) to complete? Hostile/attribution bias Do people take advantage of you? Are people mean/not nice to you? Do you think about how the things you do will affect you in the future? Decision-making Do you think carefully before you make an important decision? Do you ask for help when you don't understand something? Do you think about how the things you will do will affect others? The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 44 Appendix C Service Mapping and Market Assessment The Development Research Initiative and the Nielson Company conducted service mapping exercises to identify relevant services for WA, DA, and ISPP beneficiaries. The studies examined gaps in service provision and identified mechanisms to im- prove access, effectiveness, and potential partners (table C.1). TableC.1 Methodologies used to map service provision for social safety net beneficiaries Program Districts Methodology Widowed, • Gopalganj • At the national level, key informant interviews were conducted with Deserted, and • Khulna representatives from Humanity and Inclusion; the Sajida Foundation; the Destitute Women • Kishoreganj Bureau of Manpower, Employment and Training; the Insurance Development Allowance (WA) • Manikganj and Regulatory Authority; mobile money operators; and the Bangladesh and Disability • Natore ECD Network. Allowance (DA) • Rajbari • At the district level, 54 key informant interviews were conducted with representatives of the government, NGOs, microfinance institutions, and vocational training institutes. • Mymensingh Seventy key informant interviews were conducted with representatives from Income Support • Kurigram upazila social services, upazila health services, union parishad (union council), Program for the banks, microfinance institutions, vocational training institutes, NGOs, and the Poorest (ISPP) private sector. Note: The Development Research Initiative conducted the mappings for the WA and DA programs. The Nielson Company conducted the mapping of ISPP. The Development Research Initiative and the Nielson Company conducted market assessments to identify livelihoods that could be suitable for WA, DA, and ISPP beneficiaries (table C.2). The studies examined the economic viability and compar- ative benefits and risks of each livelihood option. TableC.2 Methodologies used to assess the market for livelihood opportunities for so- cial safety net beneficiaries Program Geographic area Methodology Widowed, • Gopalganj • 12 participatory rural appraisals were conducted with 133 individuals Deserted, and • Khulna (83 women and 50 men) who were either WA and DA beneficiaries or Destitute Women • Kishoreganj community members. Allowance (WA) • Manikganj • 48 key informant interviews were conducted with microfinance institution and Disability • Natore representatives, market operators, community leaders, and owners of local Allowance (DA) • Rajbari enterprises. • Mymensingh • 60 focus group discussions were conducted with market actors and Income Support • Kurigram women’s groups. Program for the • 18 key informant interviews were conducted with trade leaders, district Poorest (ISPP) agriculture and livestock officers, and key personnel from the Divisional Bangladesh Small and Cottage Industries Corporation. Note: The Development Research Initiative conducted the mappings for the WA and DA programs. The Nielson Company conducted the mapping of ISPP. The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 45 Notes The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 46 Notes 1. The government’s Finance Division typically includes civil service pensions as part of its estimate for social protection programs. 2. The focus on nets rather than “ladders” is also evident in the Finance Division’s list of programs by program type. Spending on “social protection” has been about five times as much as expenditure on “social empowerment.” 3. Most households receiving DA or ISPP support have a male household head. Among WA households, 47 percent have a male household head. 4. 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The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh 51 The Partnership for Economic Inclusion (PEI) is a global partnership with a mission to support the adoption of national economic inclusion programs that increase the earnings and assets of extremely poor and vulnerable households. PEI brings together global stakeholders to catalyze country-level innovation, advance innovation and learning, and share global knowledge. PEI is hosted by the Social Protection and Jobs Global Practice of the World Bank. In Practice The Partnership for Economic Inclusion | In Practice | Moving Up the Ladder: Economic Inclusion of Safety Net Recipients in Bangladesh