Can Mistargeting Destroy Social Capital and Stimulate Crime? Evidence from a Cash Transfer Program in Indonesia (with L. Cameron), forthcoming Economic Development and Cultural Change.

Can Mistargeting Destroy Social Capital and Stimulate Crime? Evidence from a Cash Transfer Program in Indonesia (with L. Cameron), forthcoming Economic Development and Cultural Change.

Are Workfare Programs In India Effective? Public Policy professor Manisha Shah evaluates the impact of antipoverty programs

By Stan Paul 

Manisha Shah’s work in development economics has taken her around the world, from Mexico and Ecuador to India and Indonesia.

Her work seeks to evaluate the impact of seemingly well-intentioned efforts such as antipoverty programs as well as their unintended consequences, using primary data collection and applied microeconomics as a tool. At home at the Luskin School, she is the Applied Policy Project coordinator for the Department of Public Policy’s Master of Public Policy (MPP) students. In addition, she teaches graduate courses in microeconomics as well as a course on international development.

In a recent working paper for the National Bureau of Economic Research (NBER), where she is a faculty research associate, Shah and her co-author, Bryce Steinberg, have evaluated the effect of India’s National Rural Employment Guarantee Scheme (NREGS). In “Workfare and Human Capital Investment: Evidence From India,” the authors posit that the NREGS workfare program, which requires beneficiaries to work on local public works projects in order to receive benefits, “could increase the opportunity cost of schooling, lowering human capital investment even as incomes increase due to increased labor demand.”

The research shows that this government program, one of the largest in the world, actually lowers both school enrollment and math scores for students ages 13 to 16. For boys in India, the antipoverty program has them substituting work for school, while adolescent girls are substituting into unpaid domestic work at home (since their mothers are now more likely to be working outside the home). Put in human terms, this means, according to Shah, that the program in India “may have caused anywhere from 650,000 to 2.5 million adolescents to leave school prematurely.”

Interestingly, the additional income from the workfare program may benefit the very young children in the household — the 2- to 4-year-olds. The authors find that human capital outcomes improve for the very youngest children as a result of NREGS.

Overall, the workfare program may serve as a disincentive for adolescents to invest in education. This is important to policy makers, who may be considering workfare as a means of poverty alleviation, says Shah. “If we believe education is important for economic growth, and that workfare programs raise prevailing wages and cause older students to substitute toward work and away from school, lump sum grants or conditional cash transfers might be other policy options to consider.”

“The takeaway from these results is that social programs have price effects, and that these price effects can have very real consequences,” Shah’s report concludes. “Ultimately it is important to maximize their potential to alleviate poverty and improve the lives of the poor.”

Other areas Shah has examined include child health and development. Recent work has involved evaluating impacts of improved sanitation on child health outcomes in rural Indonesia. She also has written on the economics of sex markets to learn how more effective policies and programs can be deployed to slow the spread of HIV/AIDS and other sexually transmitted infections.

Where will her research take her next?

Shah says her next destination is Tanzania in East Africa to study intervention programs for adolescent girls. Programs to help girls stay in school and avoid risky sex and its harmful consequences are proving unsuccessful. Shah wants to know what’s going on and why this is happening, looking to the data to provide answers.

Manisha Shah is an Associate Professor in the Department of Public Policy at the UCLA Luskin School of Public Affairs. She also is a Faculty Research Fellow at the National Bureau of Economic Research (NBER), a Faculty Affiliate at UC Berkeley’s Center for Effective Global Action (CEGA) and a Research Associate at the Institute for the Study of Labor (IZA).

Manisha Shah

Manisha Shah is Vice-Chair and Professor of Public Policy at the UCLA Luskin School of Public Affairs. Shah also serves as Director of International Development and Policy Outreach (IDPO@UCLA). She is also a Faculty Research Associate at the National Bureau of Economic Research, a Faculty Affiliate at UC Berkeley’s Center for Effective Global Action,  The Abdul Latif Jameel Poverty Action Lab, and The Bureau for Research and Economic Analysis of Development, and a Research Fellow at the Institute for the Study of Labor. Shah is an economist who received her Ph.D.  from UC Berkeley.

Shah is a development economist whose primary research and teaching interests lie at the intersection of applied microeconomics, health, and development.  She has written several papers on the economics of sex markets in order to learn how more effective policies and programs can be deployed to slow the spread of HIV/AIDS and other sexually transmitted infections.  She also works in the area of child health and education. Shah has been the PI on various impact evaluations and randomized controlled trials and is currently leading projects in Tanzania, Indonesia, and India. She has also worked extensively in Ecuador and Mexico. Her research has been supported by Bill and Melinda Gates Foundation, William and Flora Hewlett Foundation, the World Bank, and the National Science Foundation among others. Follow Shah on Twitter @Manisha_econ.

Google Scholar Citations

Published and Forthcoming Articles

Workfare and Human Capital Investment: Evidence from India (with B. Steinberg), NBER Working Paper 21543. forthcoming Journal of Human Resources.
Media Coverage: NBER Digest

The Right to Education Act: Trends in Enrollment, Test Scores, and School Quality (with B. Steinberg). AEA Papers and Proceedings, American Economic Association, May 2019, vol. 109, pages 232-238. NBER Version of Paper with appendix here.
Media Coverage: : VoxEU, IdeasForIndia

Scaling Up Sanitation: Evidence from an RCT in Indonesia (with L. Cameron and S. Olivia),  Journal of Development Economics, May 2019, vol 138.

Decriminalizing Prostitution: Implications for Sexual Violence and Public Health (with S. Cunningham). The Review of Economic Studies, July 2018, 85(3):1683–1715.
Selected Media Coverage: Vox, Slate, Washington Post, WSJ, LA Weekly, UCLA, KCRW interview, WHYY show, Seriouspod Podcast

Drought of Opportunities: Contemporaneous and Long Term Impacts of Rainfall Shocks on Human Capital (with B. Steinberg),  Journal of Political Economy, April 2017, 125(2).
Blog about paper: Ideas for India

Risk-Taking Behavior in the Wake of Natural Disasters  (with L. Cameron), Journal of Human Resources, Spring 2015, 50(2): 484-515.
Media Coverage: The Huffington Post

Can Mistargeting Destroy Social Capital and Stimulate Crime? Evidence from a Cash Transfer Program in Indonesia (with L. Cameron), Economic Development and Cultural Change, January 2014, 62(2): 381-415.

Do Sex Workers Respond to Disease? Evidence from the Male Market for Sex,  American Economic Review Papers & Proceedings, 2013, 103(3): 445-50.

Intra-household Resource Allocation: Do Parents Reduce or Reinforce Child Cognitive Ability Gaps? (with P. Frijters, D. Johnston, and M. Shields), Demography, December 2013, 50:6.

Compensated for Life: Sex Work and Disease Risk (with R. Arunachalam),  Journal of Human Resources, Spring 2013, 48:345-369.

Face Value: Information and Signaling in an Illegal Market (with T. Logan), Southern Economic Journal. 2013. 79(3), 529-564.

Handedness, Health and Cognitive Development: Evidence from Children in the NLSY (with D. Johnston, M. Nicholls, and M. Shields), Journal of the Royal Statistical Society, Series A (Statistics in Society), 2012. 

The Prostitute’s Allure: The Return to Beauty in Commercial Sex Work (with R. Arunachalam), B.E. Journal of Economic Analysis & Policy, 2012.

Sex Work and Infection: What’s Law Enforcement Got to Do with it? (with P. Gertler), Journal of Law and Economics, November 2011, 54.
Media Coverage: The Economist

To Work or Not to Work? Child Development and Maternal Labor Supply (with P. Frijters, D. Johnston, and M. Shields), American Economic Journal: Applied Economics, July 2009, 1(3): 97-110.

Nature’s Experiment? Handedness and Early Childhood Development  (with D. Johnston, M. Nicholls, and M. Shields), Demography, May 2009, 46(2): 281-302.

Prostitutes and Brides? (with R. Arunachalam),  American Economic Review Papers & Proceedings, May 2008, 98(2), 516-522.

Risky Business: The Market for Unprotected Commercial Sex (with P. Gertler and S. Bertozzi),  Journal of Political Economy, June 2005, 113(3), 518-550.
Media Coverage: NYTimes, Slate

Books and Handbook Chapters

The Oxford Handbook of the Economics of Prostitution. Scott Cunningham and Manisha Shah, editors. Oxford University Press, 2016.

Sex Work and Risky Sex in Developing Countries, In: Anthony J. Culyer (editor), Encyclopedia of Health Economics, Vol 3. San Diego: Elsevier; 2014. pp. 311-315.

Sex Work, with V. Rao, In The New Oxford Companion to Economics in India (Kaushik Basu and Annemie Maertens, editors), Delhi: Oxford University Press, Delhi, 2012.

Working Papers (Please email for most recent version)

Crimes against Morality: Unintended Consequences of Criminalizing Sex Work (with L. Cameron and J. Muz), 2019

Aggregate effects from public works: Evidence from India (with J. Cook), 2019.

How Does Health Promotion Work? Evidence From The Dirty Business of Eliminating Open Defecation (with P. Gertler, M. Alzua, L. Cameron, S. Martinez, and S. Patil). NBER Working Paper 20997.

Decriminalized Prostitution in Rhode Island Led to Fewer Rape, Gonorrhea Cases

A new working paper from Public Policy associate professor Manisha Shah and her co-author Scott Cunningham of Baylor University has made waves in the media for its groundbreaking research and surprising findings.

“Decriminalizing Indoor Prostitution: Implications for Sexual Violence and Public Health,” explores the results of seven years in Rhode Island’s history during which indoor prostitution was unintentionally decriminalized.

According to news reports, the state’s legislature amended a law in 1980 which created a legal loophole that decriminalized paid consensual sex if it took place privately indoors. This loophole went unnoticed until 2003, when police took a number of prostitutes to court and lost because of this unanticipated interpretation of the law. It wasn’t until 2009 that new legislation was passed to re-criminalize indoor prostitution.

For Shah and Cunningham, the incident served as a “natural experiment,” to explore the effect of decriminalizing indoor prostitution on the sex market, sexually transmitted infection, and the number of forcible female rape offenses.

Key findings from the study – that Rhode Island saw a large decrease in rapes and a large reduction in gonorrhea incidence for men and women post-2003 – have been widely covered by national and regional news media. Some reports note the fears of international organizations if prostitution is legalized.

Shah and Cunningham say more work needs to be done to evaluate the full spectrum of costs and benefits associated with the Rhode Island experiment, and how to better understand the precise mechanisms that link the reduction in enforcement and the announcement of the loophole in 2003 to reductions in reported rape offenses and STI outcomes.

The paper offers a number of reasons for the declines, including the possibility that the decrease in rapes was “due to men substituting away from rape toward prostitution.” Shah and Cunningham acknowledge that these are currently speculations.

“Technically, our study has internal validity but not necessarily external validity,” Shah said. “What this means is that while we can speak to the effect of decriminalization of prostitution in Rhode Island, we cannot take this and speak out of sample to some other policy environment. But, in that sense, our study is no different from nearly all studies that seek to evaluate some kind of intervention/policy change.

Their study also cannot speak to the effect of decriminalization on human trafficking, which is something that has come up in all the recent press, Shah and Cunningham said. Data limitations don’t allow them to perform a meaningful analysis of that topic.

“Our contribution to this literature is twofold,” Shah and Cunningham wrote. “First, as far as we know, we are the first social scientists to evaluate the decriminalization of prostitution using a natural experiment. This allows us to provide the first causal estimates on the impacts of decriminalization…Secondly, police agencies, lawmakers, and prosecutors all over the US have responded to the growth on the indoor sex market by reallocating large amounts of resources toward arresting sex workers. This reallocation has been considerably costly for local police since the indoor market is more diffuse and hidden. This research can influence change in policies related to police effort of enforcement of laws against prostitution, particularly related to indoor sex work.”

Shah and Cunningham hope that their paper will focus research and policy toward a more rigorous evaluation of prostitution law and policy that moves away from anecdotal work. They stress the importance of good quantitative information about the effects of policies to better understand the costs and benefits of various policy alternatives.

As for the study itself, Shah and Cunningham said they were both surprised and unsurprised by the findings.

“Everything about this experiment is unusual, so in a way, we didn’t know what was more surprising — that a state could “accidentally” legalize indoor prostitution, that no one would practically know about it for 23 years, that we would be successful at obtaining so many different sources of data to investigate it, or that we would find reductions in reported rape offenses and gonorrhea rates,” they said.

“When we started this project, we had to admit to ourselves that we really didn’t know what we should expect. Given there hasn’t been much policy experimentation around this phenomena and almost no causal evidence on the topic, policymakers and academics haven’t had quality findings upon which expectations could be based.”

Global Public Affairs Opens New Student-Faculty Discussion Series

By Adeney Zo
UCLA Luskin Student Writer

Learning can come in many forms, including class lectures, discussions and research, but the first Global Public Affairs salon aimed to combine these forms into one engaging multi-departmental, student-faculty discussion.

Put together by Urban Planning professors Michael Storper and Steve Commins, this salon created a space for students and faculty from widely varied backgrounds in Public Policy to discuss major global public affairs topics outside of the traditional lecture setting.

The main topic of the night centered around the Bill and Melinda Gates Foundation’s 2014 annual letter, titled “3 Myths That Block Progress for the Poor.” The letter aims to debunk the following three global affairs myths (through research and media examples):

  1. Poor countries are doomed to stay poor.
  2. Foreign aid is a big waste.
  3. Saving lives leads to overpopulation.

Once the debate commenced, students brought up points to defend or deconstruct each myth while faculty expanded on those ideas with information based on their own research and experience. Comments ranged from analysis of developmental markers to benefits of quantitative vs. qualitative data to dealing with corruption and misuse of foreign aid.

Professor Michael Storper led the discussion, emphasizing at the beginning that the goal of the salon was to take information learned in the classroom and apply it to engaging, intellectual debates. Other Luskin faculty members that participated included Steve Commins, Manisha Shah, Robert Schilling, Paavo Monkkonen and Susanna Hecht.