Publication: Distributional Policies and Social Cohesion in a High-Unemployment Setting
Loading...
Published
2022-06
ISSN
Date
2022-06-27
Author(s)
Editor(s)
Abstract
This paper studies the impact of distributional policies on social cohesion. The focus is on South Africa, a country with the highest unemployment rate worldwide and a major destination hub for the forcibly displaced. The paper uses a regression discontinuity design based on the eligibility rule of an unconditional cash transfer program (Old Age Pension) together with multiple rounds of the country’s Social Attitudes Survey and estimates the impact of the cash transfer to the local population on over 100 variables capturing different dimensions of social cohesion, while accounting for multiple hypothesis testing. Results show a limited impact of the transfer on social cohesion. Transfer increases life satisfaction and views favorable towards racial diversity. However, it has only a marginal effect on interpersonal trust and a very small effect on attitudes towards immigration. These findings are consistent with theoretical models where anti-immigrant behaviors are not the result of low-income but rather due to non-wage factors such as ethnic background or language barriers.
Link to Data Set
Citation
“Agüero, Jorge M.; Fasola, Eniola. 2022. Distributional Policies and Social Cohesion in a High-Unemployment Setting. Policy Research Working Papers;10103. © World Bank. http://hdl.handle.net/10986/37597 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Publication The Economic Value of Weather Forecasts: A Quantitative Systematic Literature Review(Washington, DC: World Bank, 2025-09-10)This study systematically reviews the literature that quantifies the economic benefits of weather observations and forecasts in four weather-dependent economic sectors: agriculture, energy, transport, and disaster-risk management. The review covers 175 peer-reviewed journal articles and 15 policy reports. Findings show that the literature is concentrated in high-income countries and most studies use theoretical models, followed by observational and then experimental research designs. Forecast horizons studied, meteorological variables and services, and monetization techniques vary markedly by sector. Estimated benefits even within specific subsectors span several orders of magnitude and broad uncertainty ranges. An econometric meta-analysis suggests that theoretical studies and studies in richer countries tend to report significantly larger values. Barriers that hinder value realization are identified on both the provider and user sides, with inadequate relevance, weak dissemination, and limited ability to act recurring across sectors. Policy reports rely heavily on back-of-the-envelope or recursive benefit-transfer estimates, rather than on the methods and results of the peer-reviewed literature, revealing a science-to-policy gap. These findings suggest substantial socioeconomic potential of hydrometeorological services around the world, but also knowledge gaps that require more valuation studies focusing on low- and middle-income countries, addressing provider- and user-side barriers and employing rigorous empirical valuation methods to complement and validate theoretical models.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Rigging the Scores: Corruption through Scoring Rule Manipulation in Public Procurement Auctions(Washington, DC: World Bank, 2025-12-02)Public procurement is highly susceptible to corruption, especially in developing countries. Although open auctions are widely adopted to curb it, this paper finds that corruption remains prevalent even within this procurement format. Procurement officers can collaborate with firms to manipulate scoring rules, ensuring predetermined winners, while corrupt firms submit noncompetitive bids to meet minimum bidder requirements. Using extensive data from Chinese public procurement auctions, the paper introduces model-driven statistical tools to detect such corruption, identifying a corruption rate of 65 percent. A procurement expert audit survey confirms the tools’ reliability, with a 91 percent probability that experts recognize suspicious scoring rules when flagged. Firm-level analysis reveals that local, state-owned, and less productive firms are favored in corrupt auctions. Lastly, the paper explores policy implications. Analysis of the national anti-corruption campaign since 2012 suggests that general investigations may be insufficient to address deeply ingrained corrupt practices. Using counterfactuals based on an estimated structural model, the paper shows that implementing anonymous call-for-tender evaluations could improve social welfare by 10 percent by eliminating suspicious rules and encouraging broader participation.Publication Labor Demand in the Age of Generative AI: Early Evidence from the U.S. Job Posting Data(Washington, DC: World Bank, 2025-11-18)This paper examines the causal impact of generative artificial intelligence on U.S. labor demand using online job posting data. Exploiting ChatGPT’s release in November 2022 as an exogenous shock, the paper applies difference-in-differences and event study designs to estimate the job displacement effects of generative artificial intelligence. The identification strategy compares labor demand for occupations with high versus low artificial intelligence substitution vulnerability following ChatGPT’s launch, conditioning on similar generative artificial intelligence exposure levels to isolate substitution effects from complementary uses. The analysis uses 285 million job postings collected by Lightcast from the first quarter of 2018 to the second quarter of 2025Q2. The findings show that the number of postings for occupations with above-median artificial intelligence substitution scores fell by an average of 12 percent relative to those with below-median scores. The effect increased from 6 percent in the first year after the launch to 18 percent by the third year. Losses were particularly acute for entry-level positions that require neither advanced degrees (18 percent) nor extensive experience (20 percent), as well as those in administrative support (40 percent) and professional services (30 percent). Although generative artificial intelligence generates new occupations and enhances productivity, which may increase labor demand, early evidence suggests that some occupations may be less likely to be complemented by generative artificial intelligence than others.Publication Investment Policy Reforms and Foreign Direct Investment Inflows(Washington, DC: World Bank, 2025-12-01)Foreign direct investment has the potential to introduce much-needed capital and expertise in emerging and developing economies. To attract foreign direct investment, many countries have eased restrictions on foreign ownership in various sectors, reformed their institutions, and set up investment promotion agencies. Until the mid-2010s, Ethiopia remained one of the few countries that resisted this trend, with several stringent restrictions in place on foreign direct investment entry and operations in the country. This study employs a synthetic control method to examine patterns in foreign capital inflows following a series of investment policy reforms that were substantively introduced in the mid-2010s (circa 2015). The study offers evidence that investment policy reforms contributed to a significant foreign direct investment inflow in Ethiopia, compared to what would have occurred in the absence of these policies. An alternative strategy that conservatively specifies the donor country pool using an AI-assisted deep search technique changes the donor pool weighting matrix of the synthetic control method, but the estimated policy effects largely remain robust to this specification. The findings highlight the importance of targeted reforms in promoting foreign direct investment inflow in developing countries.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Political Economy and Forced Displacement : Guidance and Lessons from Nine Country Case Studies(Washington, DC, 2014-06-17)This report was produced for the Global Program on Forced Displacement and describes why and how to conduct political economy analysis (PEA) of forced displacement. It also illustrates how PEA may contribute to understanding forced displacement crises with nine case studies: Casamance (Senegal), Colombia, Cote dapos;Ivoire, Democratic Republic of Congo, Liberia, the Philippines, Somalia, South Sudan, and Zimbabwe. Forced displacement is understood here as a situation where persons are forced to leave or flee their homes due to conflict, violence, or human rights violations. The key elements of forced displacement PEAs include: i) a review of the historical context and displacement characteristics; ii) durable solutions prospects; iii) environmental, geographic, social, political, and economic drivers, constraints and opportunities; (iv) needs of the displaced and hosts; v) existing policies, government/institutional context, and operations; and vi) recommendations. Recommendations on development policies and programs that result from a PEA characteristically fall into at least four categories, namely: i) improving access to land, housing and property; ii) reestablishment of livelihoods; iii) improving delivery of services; and iv) strengthening accountable and responsible governance. PEAs of forced displacement analyze the contestation and distribution of power and resources along with the development challenges associated with forced displacement crises. By nature of their marginalization and the frequently protracted nature of their exile, the forcibly displaced are especially vulnerable as power and resources are disputed. The purpose of conducting a PEA on forced displacement is to inform policy dialogue and operations so that the interests of vulnerable forcibly displaced populations and their hosts are effectively accommodated in resource allocation decision-making and in poverty alleviation initiatives. From the earliest design phase to dissemination of the results, the PEA is essentially an exercise in effectively collecting relevant data, analyzing these, and then marketing the analysis and its operational implications to the right stakeholders. This report is intended to be an aid in navigating these decision points and activities and to encourage more frequent and better use of political economy analysis in evaluating and addressing forced displacement.Publication Impact of Migration on Economic and Social Development : A Review of Evidence and Emerging Issues(2011-02-01)This paper provides a review of the literature on the development impact of migration and remittances on origin countries and on destination countries in the South. International migration is an ever-growing phenomenon that has important development implications for both sending and receiving countries. For a sending country, migration and the resulting remittances lead to increased incomes and poverty reduction, and improved health and educational outcomes, and promote economic development. Yet these gains might come at substantial social costs to the migrants and their families. Since many developing countries are also large recipients of international migrants, they face challenges of integration of immigrants, job competition between migrant and native workers, and fiscal costs associated with provision of social services to the migrants. This paper also summarizes incipient discussions on the impacts of migration on climate change, democratic values, demographics, national identity, and security. In conclusion, the paper highlights a few policy recommendations calling for better integration of migration in development policies in the South and the North, improving data collection on migration and remittance flows, leveraging remittances for improving access to finance of recipient households and countries, improving recruitment mechanisms, and facilitating international labor mobility through safe and legal channels.Publication Gaining from Migration : Trends and Policy Lessons in the Greater Mekong Sub-region(World Bank, Thailand, 2012)This report contributes to the migration policy debates in the Greater Mekong Sub-region (GMS) by providing evidence of the impacts of migration; at the same time, it outlines possible policy approaches to increase benefits from migration. The study focuses primarily on Thailand and Myanmar: the main labor receiving and sending countries, respectively, in the GMS. This report not only presents the recent migration trends and drivers in the GMS but also addresses policy issues related to the economic and social impact of migration on countries both receiving and sending labor; it also addresses the issue of migrants' welfare including social services; and the role of migration policy and institutions. The findings challenge several existing paradigms of developing country migration research and may have broader transferability. Specifically, the proceeding analysis suggests: (a) demographic and income differences among the GMS countries drive migration within the region, suggesting the rising prominence of South-South migration; (b) migration in the GMS tends to be long-term, contrasting the more temporary nature of migration from most of the world's developing countries; and (c) economic factors contribute to migration within the region significantly more so than political factors.Publication Albania : Social Safety Net Review(Washington, DC, 2004-12-29)In 1989, Albania's rigid political and socioeconomic structure shattered beyond repair. Turbulence soon invaded every domain of life. As the state imploded, so did the state-run economy. This review explores ongoing consequences of this difficult transformation that took place since 1989 and of policy initiatives to mitigate or ameliorate its effects. Albania has been much studied; the review addresses important information gaps. It establishes, from the representative 2002 Living Standards Measurement Survey (LSMS), which kinds of families receive public income transfers and private income flows in what amounts and from what sources. It estimates the impact that these public and private income flows have in mitigating pre-transfer and post-transfer poverty among households. It does this by type of family and source of income flow, for all Albanian households and for various subsets of them. This review analyzes the relative importance of pensions and social assistance in alleviating poverty among rural households with aged members. This review also documents and links data on expenditures under social programs with data on program beneficiaries for recent years and it identifies current tradeoffs among the multiple objectives of social safety net policies, including those relating to coverage, adequacy, work incentives, equity, and effective government spending. Finally, it suggests options for future development of social safety net policies, including ways to strengthen overall policy linkages and programmatic coordination among social programs.Publication Assessing the Impacts and Costs of Forced Displacement : Volume 1. A Mixed Methods Approach(World Bank, Washington, DC, 2012-05-01)Globally, over 40 million people have been forced to leave or flee their homes due to conflict, violence, and human rights violations either as refugees outside their country of origin or Internally Displaced Persons (IDPs). A substantial number live in protracted displacement where return has not been possible.Forced displacement is a humanitarian crisis: but it also produces developmental impacts - short and longer term, negative and positive - affecting human and social capital, economic growth, poverty reduction efforts, environmental sustainability and societal fragility. A prevailing view is that refugees are a burden on the development aspirations of host countries and populations and that negative socio-economic and environmental impacts and costs outweigh the positive contributions (actual or potential) that forcibly displaced people might make. The losses incurred by the displaced populations themselves reinforce perceptions of vulnerability and dependency and thus assumptions of the burden they might impose. This study provides such a methodology. The development and drafting of the methodology and the state of the art literature review was conducted by the refugee studies centre, with valuable and constructive inputs from the partner organizations.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.