Social Safety Nets and Productive Outcomes: Evidence
and Implications for Bangladesh
Principal Investigator
Ismat Ara Begum, PhD
Department of Agricultural Economics
BAU, Mymensingh-2202
Interim Report Prepared for Presentation at
NFPCSP-FAO Workshop
28-29 November, 2012; Dhaka
1
Research Team
Prof. Dr. Shaheen Akter
Co-Investigator
Prof. Noor Md. Rahmatullah
Co-Investigator
Dr. Mohammad Jahangir Alam
Co-Investigator
Dr. M. Sayeedul Haque
Research Assistant
Md. Mojammel Haque
Research Assistant
Ferdoushi Begum
Research Assistant
2
Introduction

Social safety net programs (SSNPs) are non-contributory
transfer programs designed & implemented for the poor & the
vulnerable groups

These groups are always a concern to the Bangladesh govt.

One of the main agenda of govt. is reduction of poverty.

Like many other developing countries, SSNPs can play a vital
role to reduce poverty in Bangladesh.

Safety net spending is around 15% of the Bangladesh govt.
expenditure & 24.57 % HHs received benefit from SSNPs (in
2010)
3

31.5 % of households in the country live in poverty
 So, it remains unclear whether SSNPs only prevent entry into
poverty or promoting exit from poverty or both
 Studies investigated ONLY targeting, delivery mechanism,
operational performance, alternative design etc.
 However, evidence about the productive outcome impacts at
household and community levels is scarce
 This research will contribute to understand –
 Whether selected SSNPs are generating productive
outcomes & are contributing to households’ exit from
poverty and food insecurity
 What constraints or enabling factors are mediating these
4
outcomes
Objectives
 To document potential productive impacts of selected public
safety nets at the household and community levels and the
possible incentive framework behind those results at the two
levels
 To identify successful examples of government and NGO
safety net interventions which foster productive outcomes
 To draw implications for the design and implementation of
SSN in Bangladesh and for complementarities among
government agencies interventions
5
Conceptual Framework
Goal
Food Security
Poverty reduction
Credit accessibility
Risk coping
Preventing school drop-out
Community Level
Household Level
• Labor allocation (farm vs off farm, adults
vs children)
• Asset accumulation/protection
• Change in use of inputs and techniques
in crop production
• Consumption/food security
• Human capital accumulation
• Investments
• Risk coping strategies
M
ec
ha
ni
s
m
Income effect
Productivity effect
Purchasing power effect
• Goods and labour markets
• Multiplier effects in local economy
• Creation of community level assets/
infrastructure
• Gender inequalities
I
m
p
a
ct
 Alleviation of liquidity
constraints
 Certainty & predictability of
income
 Promoting child education
 Optimal intrahousehold
resource allocation
P
at
h
w
a
y
s
Poor and Vulnerable People
Inter
venti
on
Social Safety net Programs
Cash/Kind /Training
6
Hypothesis (Household level)
Hypothesis:
SSN interventions either cash or kind (conditional, unconditional,
public works) may facilitate significant changes in income generating
activities, labour allocation, accumulation of productive assets and
productive investments of beneficiary household than non-beneficiary
households.
Research Questions
 What are the productive outcomes of selected public safety nets
at the household level?
Methodology
 For estimating impact we used propensity score matching (PSM)
 We used HIES 2010 as a single cross section for identifying the
treatment & control groups
7
Hypothesis (Local Economy Level)
The community will benefit economically from social safety nets
interventions through local goods & labour markets and multiplier
effects
Research Questions
 What are the productive outcomes of selected public safety nets at
the community level?
 Local goods (buying-selling activities, prices etc.)
 Labour markets (new employment, employment diversification,
wages etc.)
 Multiplier effects (investment, employment, economic growth)
Methodology
 HIES community dataset, FGD (30) and KII(20)
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Study Phasing
The study is designed to conduct into three phases
 Phase 1 → Reviewing Literature, assess the productive impacts
of selected SSNs at household level in Bangladesh (literature
review and HIES data)
 Phase 2 → presents the impact at community level and recent
evidence and documents on the productive outcomes of the
safety nets in Bangladesh & other countries (Field survey, HIES
data & literature review)
 Phase 3 → Deals with the issues of enhancing the productive
outcomes of the SSNPs (Impact results, SSN-IMPACT matrix,
FGDs & KIIs)
9
Phase 1: Literature review, estimating productive outcomes at
household level
For estimating productive outcomes we considered  Interventions with an explicit income-generation component




Old age allowance
Allowances for the widowed, destitute and deserted women
Agriculture rehabilitation
A combination of Cash for work, VGD, food for work & 100 days scheme
 Interventions with no explicit income-generation component
 Stipend for primary students
 Stipend for secondary and higher secondary/female students
10
Table 1 : Number of beneficiary households of the selected SSNPs in HIES 2010
No. Selected SSNPs
1
2
3
4
5
6
Old Age Allowance (OAA)
Allowance for the Widowed, Deserted
and Destitute (AWDD)
Combined program (CFW, VGD, FFW,
EGP 100 days)
Agriculture Rehabilitation
Stipend for Primary Students
Stipend for Secondary & Higher
Secondary/ Female Student
Total
Programs
% of beneficiary
beneficiary HHs
households
485
27.0
203
11.3
41
446
444
2.3
24.9
24.7
176
1795
9.8
100
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Table 2: Measurable productive outcome indicators at household level
Outcomes
Indicator
Labour
allocation
Relative ( farm , non-farm, male,
female, self) employment
Income
generating
activities
Total no. of activities involved, Total
(farm, non-farm)income,
Measurable
indicator
Average working
hours per day per
worker
Number of total
activities per
household per
active member
Imputed from 2010 HIES
Calculating daily male and
female hours in farm ,
non-farm activities
Calculate total number of
activities, Calculating total
income (farm, non-farm)
Investments Own land per person, Real
per person/
expenditure on tools, animals, family household
enterprises, durable goods & housing
improvement per household
Calculate own land , hhs
expenditure
Shock and Asset sold ,
Dummy variable: 1
coping
Insurance, migration, school drop-out and 0
mechanism
Shock and coping
mechanism
Consumption
Per capita
Calculating Sum of per
capita value of food and
non-food expenditure.
12
Table 3 : Observable characteristics included as independent variables in the PSM
Variables
Dependent variable
AgeH
AgeH2
EduH
Description
Treatment=1
Age of household head (years)
Age of household head (years) square
Education of household head (years of schooling
EduHD
Land
FamS
Chl514
Male65
Female62
Disable
DayL
mstatF
Household head is illiterate=1
Owned land (decimal)
Total household size
Children 5-14 years
Male 65+ year old=1
Female 62+ year old=1
Member disable=1
At least a member work as day labor=1
Women currently separated, divorced etc. =1
Elect
Electricity connection=1
Room
Room per person in household
Region 1
Regional dummy
R2
Regional dummy
R3
Regional dummy
R4
Regional dummy
Sample Size (n)=5635 including treatment group (T=1795)
Mean
0.32
46.14
2332.25
SD
0.47
14.26
1453.23
2.78
0.62
35.87
4.48
52.03
1.12
0.15
0.12
0.03
3.96
0.49
92.66
1.83
19.28
1.08
0.36
0.33
0.18
1.31
0.24
0.48
0.52
0.22
0.05
0.08
0.80
0.43
0.50
0.32
0.42
0.21
0.27
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Conditional Independence Assumption
Table 4: Average bias and test statistics, PSM Analysis
Overall tests
OAA
Raw sample
Matched
AWDD
Raw
Matched
AR
Raw
Matched
PEdu
Raw
Matched
Second Edu
Raw
Matched
All SSNP
Raw
Matched
Probit Pseudo R2
LR χ2
p> χ2
0.244
0.012
740.25
16.24
0
0.507
45.1
3.4
30.3
2.9
0.243
0.009
391.46
4.82
0
0.988
40.6
3
31
1.9
0.137
0.019
393.50
23.96
0.000
0.156
19.4
3.8
17.5
3.5
0.163
0.005
464.81
6.34
0.000
0.999
22.8
2.2
14.5
2.1
0.177
0.015
256.42
7.36
0.000
0.987
30.8
3.8
34.4
2.8
0.087
0.003
613.39
17.39
0.000
0.563
18.4
3.4
20.4 14
3.1
Mean Bias Median Bias
Common Support or overlap region
Figure 1 : Common supports
(Stipend for Primary Education Program)
0
.2
.4
.6
Propensity Score
Untreated
0
.2
.4
Propensity Score
Untreated
.6
Treated
.8
1
Treated
.8
Figure 2 : Common supports
(Agriculture Rehabilitation Program)
15
Table 5 : Impact of Old Age Allowance on productive outcomes
Indicators
Treatment Control
ATT
t value
Working hour per day
Number of non-farm activities
Self-employed at non-farm (av. number)
Annual salary received from non-farm sector (TK)
11.00
1.54
0.34
12585.39
11.05
1.50
0.31
17965.65
-0.04
0.04
0.03
-5380.26
-0.06
0.29
0.57
-1.11
Value of agricultural assets
Total credit
5315.67
5787.84
2132.21
5621.65
3183.46
166.19
0.82
0.07
Land_purchased
0.01
0.01
0.00
-0.46
Purchase of agril tools
3732.19
49.32
3682.87
1.09
Non_food_expenditure
39998.82 40378.83 -380.01
-0.07
Annual expenses on durable goods (TK)
6076.52
3082.35
1.3
Annual income from crop production (TK)
9266.94
12111.51 -2844.56
Annual food expenditure (TK)
364806.02 391234.07 -26428.05 -1.25
2994.18
-0.81
16
Table 6 : Impact of AWDD on productive outcomes
Indicators
Treatment
Control
ATT
t value
10.53
1.46
0.29
10.98
1.26
0.27
-0.45
0.20
0.02
-0.54
1.19
0.26
9384.93
2208.19
705.02
773.06
15255.58
4612.41
4141.13
1024.82
-5870.66
-2404.23
-3436.11
-251.76
-1.17
-2.32
-2.72
-1.02
4936.21
4534.48
401.72
0.27
Land purchased (yes=1)
0.00
0.03
-0.02
-1.9
Non-food expenses (TK)
33468.16
36404.03
-2935.87
-1.21
Annual expenses on durable goods (TK)
2416.01
3541.38
-1125.37
-1.05
4723.13
0.23
246.7
1.58
Working hour per day
Number of non-farm activities
Self-employed at non-farm (av. number)
Annual salary received from non-farm sector (TK)
Annual income from livestock (TK)
Value of agricultural assets
Spending in fertilizer (Tk/farm)
Total credit
Annual Food Expenditure (TK)
Annual Health Expenditure (TK)
346637.13 341914.00
600.4
353.8
17
Table 7 : Impact of Agriculture Rehabilitation Program on productive outcomes
Treatment
Control
ATT
t value
Number of farm activities
0.94
0.57
0.37
7.75
Number of non-farm activities
1.16
1.71
-0.56
-4.27
Day_labourer at non-farm activities
0.12
0.22
-0.10
-3.35
Self employment in farm activities
1.46
0.78
0.68
9.74
Self-employed at non-farm (av. number)
0.34
0.47
-0.13
-2.04
Income from livestock products
8213.77
5988.32
2225.45
1.86
Value of agricultural assets (TK)
15969.10
6195.55
9773.56
3.37
Spending in fertilizer (Tk/farm)
4135.11
1911.02
2224.08
5.02
Total credit
8911.43
10648.65
-1737.22
-0.42
Asset sold
0.06
0.03
0.02
1.64
Purchase of agril tools
1049.13
553.39
495.73
0.68
Annual income from crop production (TK)
54771.11
26231.54
28539.58
5.85
Annual food expenditure (TK)
510080.11
494596.49
15483.62
0.77
Indicators
 ARP is a promising means of safety net for the marginal & small farmers
18
 This type of safety net for farming communities could contribute more to productive
outcomes
Table 8 : Impact of Stipend for Primary Education Program on productive outcomes
Indicators
Treatment
Control
ATT
t value
Number of non-farm activities
1.74
1.46
0.28
2.19
Day labourer in non-farm activities
0.31
0.19
0.12
3.81
Self-employed at non-farm (av. number)
0.55
0.55
0.00
0.07
Annual salary received from non-farm sector (TK)
11100.54
9085.60
2014.94
0.83
Value of agricultural assets (TK)
6053.90
5101.76
952.14
0.39
Spending in fertilizer (Tk/farm)
962.22
1493.66
-531.44
-0.87
Purchase of agril tools
1046.58
809.03
237.55
0.29
Annual non-food expenses (TK)
42798.61
50449.31
-7650.71
-2.11
Annual expenses on durable goods (TK)
3397.31
5119.98
-1722.67
-1.54
Annual income from crop production (TK)
15712.61
15688.14
24.47
0.01
Annual food expenditure (TK)
451680.60 479105.19
-27424.59
-1.53
-0.76
Annual education expenditure (TK)
4509.41
4981.19
-471.79
Annual health expenditure (TK)
824.58
556.24
268.35
1.7
19
Table 9 : Impact of Secondary & Higher Secondary Education Program
Indicators
Treatment
Control
ATT
t value
Number of non-farm activities
1.99
1.76
0.23
1.07
Self-employed at non-farm (av. number)
0.68
0.34
0.34
3.59
Ann. salary received from non-farm (TK)
42445.60
32772.68
9672.92
0.99
Value of agricultural assets (TK)
4621.59
11844.66
-7223.07
-2.28
Total credit
25295.45
57354.55
-32059.09
-1.53
108.41
105.63
2.78
0.04
Annual expenses on durable goods (TK)
11901.73
6063.86
5837.86
0.98
Income from vegetable production
4679.35
4084.61
594.73
0.31
Annual food expenditure (TK)
580628.93
565582.52
15046.41
0.34
Annual education expenditure (TK)
13472.40
10671.86
2800.54
1.41
981.98
458.84
523.15
1.95
Purchase of agril tools
Annual health expenditure (TK)
20
Phase 2: Outcomes at community level, evidence and documents on
the productive outcomes
RQ
1) What are the productive outcomes of selected
safety nets at the community level ?
2) Is there any difference between the productive
outcomes of male and female at community level?
 FGD & KII
HIES community survey data collected
21
Phase 3: Enhancing the productive outcomes of the SSN
Research Questions
1) What are the successful examples of government & NGOs
safety nets interventions which foster productive outcomes?
2) What are the recommendations for adjustment and actions?
3) What would be the alternative coordination/ integration
mechanism at the local and central level?
For RQ (1)
 International as well as regional programs similar to
interventions has been reviewed
 Particularly we aim to identify productive roles of widely cited
safety net programs.
 Program-impact matrix will be developed
22
Phase 3: Research question 2 & 3
 Based on the results in phase-I & 2, recommendations will be
provided for adjustments & actions to be taken to maximize the
productive outcomes
 Recommendations will consider whether existing institutional
& operational arrangements as well as policy frameworks can
foster the changes recommended
 Alternative coordination/integration mechanisms will also be
explored
23
Major activities and progress made
Work Plan
Desk research: working on research problem, organizing
literature review, formulating conceptual framework etc.
Update/Progress made
Completed (Literature review could be
modified & improved)
Draft inception report
Preparation and submission of final inception report
Inception workshop at BAU
Developing qualitative check list for FGDs/KIIs, pre-testing and
finalizing checklists
Collecting secondary documents including the HIES 2010 data
Preparation of methodological note which will incorporate
qualitative check list, sample design, detailed fieldwork plan
etc.
Sampling, selection of data enumerators and organizing
training
Conducting complementary field survey at the community
village level/FGD/KII
Data cleaning/preparation of HIES data
Data cleaning/preparation of complementary field survey data
Preparation and submission of draft interim report
Data analysis and model estimation
Preparation & submission of (a) draft report (b) dataset,
codebooks & documentations (in electronic format)
Completed
Completed
Completed
Completed
Final workshop with results
Preparation and submission of final report (with dataset)
/publications/writing articles
To be done
To be done
Completed
Completed
Completed, Training will be organized
before going to complementary field survey
To be done
Completed
To be done
Submitted
Going-on
To be done
24
25