Week of May 30, 2016

1. Basic Income: Basic income's 15 minutes of fame seem to be stretching on. In the New York Times, Eduardo Porter rains on the parade, at least in the US context. Paul Niehaus is still marching anyway: he hosted a Reddit Ask Me Anything about GiveDirectly's basic income experiment in Kenya. Meanwhile, the MacArthur Foundation announced it's going to give $100 million to a single organization to "solve" a social problem. Poor choice of words aside, I can't think of a better use of that money than expanding basic income experiments into other countries.  

2. Nigerian Entrepreneurs: We all know about a certain kind of Nigerian grassroots entrepreneur. But there are others. PlanetMoney has a podcast about David McKenzie's experiment in giving large cash grants to winners of a business plan competition. David also has a new paper exploring how well participants in the competition (winners and losers) anticipate the effects of winning the cash grant. Most think the impact of the money will be larger than it is, and their estimates don't help predict who will benefit most from receiving the cash.

3. Payday Lending: The US Consumer Finance Protection Board published its long-anticipated proposed regulations for the payday lending industry. Reaction is mixed with some praising the step forward and others suggesting the regulations don't go far enough. It's a tough issue--there are a lot of bad products out there but making credit constraints more binding for the poor isn't great. Here's a reminder about how costly illiquidity is for poor households, even when they don't borrow. CFSI has a look at the demand for small-dollar, short-term credit. And here are the stories of two households from the US Financial Diaries, and how short-term credit can help and hurt.      

4. Work Gap: The theoretical concept of payday lending is that users are borrowing against their next paycheck. Fewer people in the lower-third of the income distribution are getting a paycheck though and those that do are working fewer hours, points out Isabel Sawhill. She and her team model the effects of various proposals and find that few have a material effect, other than full employment. Volatile hours and the lack of paid labor helps explain why behaviorally-informed adjustments to policies like Individual Development Accounts still don't yield any increase in these households ability to save

5. Cashless Societies: What percentage of global consumer transactions are in cash? It's still more than 80 percent. Here's a new framework for assessing which countries would benefit most (at least in economic terms) from moving away from cash and which countries are most ready to make a cashless transition. No word on which countries have the governance to make digital money safe from both criminal and government interference.

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