brookings.edu (11.07.2018) Iraq is a middle-income country with a tragic recent history of violence and conflict, yet a wealth of oil reserves with which to fund extensive income transfers to its population. While not all of the findings are generalizable, a number of them are relevant to the provision of social support in other countries.
here is much debate now—in both developed and developing economies—on the merits or de-merits of universal basic income (UBI), with strong opinions on either side. Advocates clash with those who see targeted transfers to the poor—such as the conditional cash transfers first pioneered in Latin America—as better at providing incentives for long-term investments in health, education, and labor force participation. Yet some research finds that targeted public welfare programs often come with stigma and disempowerment, in addition to high administrative costs, supporting the case for universal basic income guarantees. Critics of universal programs highlight the fiscal burdens such programs can impose, as well as labor market and other disincentives that they may introduce.
Authors
Talajeh Livani
Consultant - World Bank
Carol Graham
Leo Pasvolsky Senior Fellow and Research Director - Global Economy and Development
We surely cannot resolve those debates. Yet our recent research on the subjective well-being effects of a wide range of social assistance programs in Iraq may inform them. Iraq is a middle-income country with a tragic recent history of violence and conflict, yet a wealth of oil reserves with which to fund extensive income transfers to its population. While not all of the findings are generalizable, a number of them are relevant to the provision of social support in other countries.
Subjective and objective well-being metrics are complementary measures of development. They do not always move in the same direction, however, and the gaps in what each find often highlight anomalies and progress paradoxes. For example, while in theory additional income (regardless of the source) should contribute positively to individuals’ welfare, transfers do not always enhance subjective well-being. Our research on Iraq suggests that the way in which income is generated matters, even in contexts of conflict and instability. Self-generated income is more conducive to life satisfaction than non-contributory public or private income assistance. Some types of public transfers are even negatively associated with life satisfaction, likely due to a sense of loss in autonomy, self-worth, and creativity for recipients.
Since the early 1980s, Iraq has been at the center of various types of domestic and international conflicts, with devastating economic and social consequences. Given Iraq’s recent history, public transfers play a crucial role in the very survival of Iraqi citizens, and, as such, should enhance life satisfaction and other dimensions of well-being. We looked into this question, using the 2012 Iraq Household Survey, the most comprehensive survey ever carried out there. The survey provides a wide range of information on income, socioeconomic traits, transfers, and subjective well-being at the individual level. We found that even in the extreme economic and political uncertainty in Iraq, individuals derive greater satisfaction from public assistance programs and income generation processes that emphasize self-reliance and independence.
In 2012, about 20 percent of Iraqis lived under the poverty line, with another large proportion of the population vulnerable to falling into poverty. Surprisingly, male-headed households were, on average, poorer than female-headed ones. Female heads accounted for approximately 12 percent of households, the majority of whom were widows. The lower poverty rate among female-headed households (16 percent versus 20 percent for male-headed households) was likely due to the additional assistance that they received from various sources. Areas other than Baghdad and the Kurdish region had more poverty; in 2012, the headcount poverty rates in the Kurdish region, Baghdad, and the rest of Iraq were 12 percent, 18 percent, and 22 percent, respectively. Families in the distant Kurdish region were less dependent on assistance than the rest of Iraq.
Government support is a major component of family income in Iraq. Non-labor income, which is dominated by government assistance but also includes private income assistance and capital income (income generated from own assets and property), accounts for 32 percent of total income for Iraqi families. For households in the poorest income decile, it is as high as 51 percent of total family income.