Behavioural science can aid welfare of migrant workers

March 11, 2021 6:00 AM

We must promote cost-effective interventions that take the preferences and contexts of beneficiaries into account

Putting behavioural science at the forefront of policy design and economic decision-making could help us better understand approaches to inclusive development. (File image)Putting behavioural science at the forefront of policy design and economic decision-making could help us better understand approaches to inclusive development. (File image)

By Anmol Narain & Janak Priyani

The Economic Survey 2021 and Budget FY22 outline the need ensuring social security and basic necessities for migrant labour in the country. Long-term inclusion will depend on scheme design and state capacity.

The need of the hour is to bring migrant labour to the forefront of policy-making and tweak major pro-poor schemes to ensure the mobile poor are not excluded. Behavioural insights can shed light on how key interventions can be designed.

The mobile poor: Existing data and gaps
In India, internal migrants are 37% of the total population—roughly 450 million people— as per Census 2011. Meanwhile, informal labour constitutes almost 90% of the total workforce in India. The pandemic caused tremendous stress to this segment and highlighted two challenges: A lack of integrated data on the informal sector in India and a dearth of evidence on contexts shaping the behaviour of stakeholders in the informal economy.

The government has taken several steps to provide relief to the mobile poor, such as the Pradhan Mantri Garib Rozgar Yojana as an employment scheme for migrants, One Nation One Ration Card for PDS portability and shelters in the course of transit. Yet, when it comes to long-term policies for the welfare of India’s mobile poor, there is little integration of various datasets that gauge the strength of the target beneficiaries and the quantum of access to pro-poor schemes. In addition to augmenting the data infrastructure, spending and capacity building, a complementary approach to the design of systematic outreach to India’s poor and mobile labour is through the lens of behavioural science.

The path forward
Behavioural science combines insights from economics, psychology and related disciplines to create a more accurate picture of human behaviour, from intentions to actions. Poverty—of time, resources, opportunity & access to safety-nets—characterises informal labour in India.

Putting behavioural science at the forefront of policy design and economic decision-making could help us better understand approaches to inclusive development.

For effective social safety-nets, we need to address the cognitive burden of poverty, rethink the factors that shape preferences, move beyond the assumption that providing information is enough to elicit uptake, and understand the ways in which costs and incentives affect behaviour.

In this context, a growing pool of evidence can be leveraged for building policy frameworks for the mobile poor in India. The red tape of access is a significant barrier to uptake. Simplifying paperwork, and automatic enrolment in schemes using qualifying criteria, can make a big difference.

In one study by J-PAL, participation in interest-free loans for piped water connections increased from 10% to 69% in rural Morocco when households were given a helping hand in filling out applications. There are also studies which emphasise the importance of creating ‘slack’ or adequate cushions to help people become self-sufficient. Cash transfers have shown significant promise in this regard.

Scheme designs could also be time-sensitive. In a Princeton study on the timing of subsidies to farmers, performance on a test for sustained attention was found to be worse around harvest season (when money was tight).

In fact, worrying about money impaired farmers’ thinking almost as much as going without sleep for a night, and was the equivalent of a 13-point drop in IQ. Time-agnostic subsidy provision could thus miss substantive gains, and it would be better to administer them when people are most receptive to uptake.

Countries around the globe have started to acknowledge the value addition of insights from behavioural science Starting with the Behavioural Insights Team in the United Kingdom, to countries such as Australia, Canada, Denmark, France, Germany, Netherlands, Singapore, and the US, many countries have set up institutional ways to use evidence from the field for better policy design. This has become a common model, with others such as Mexico, Indonesia, Kuwait, Kenya, Qatar, and the UAE following suit.

India is at a critical juncture of development, with a burgeoning youth population in need of productive employment and a workforce that remains overwhelmingly informal and mobile. One of our highest priorities, therefore, should be to garner critical data on the mobile poor. In her latest Budget speech, the finance minister referred to the creation of a data portal to include gig workers, construction workers and others in an effort to improve access to social welfare. An integrated database is a good start.

Additionally, we need to promote rigorous pilots of cost-effective interventions that take the preferences and contexts of beneficiaries into account. Designing policies on this evidence base would be critical for the success of our welfare state, and for the long-term prosperity of the nation.

Authors are Young Professionals, NITI Aayog
Views are personal

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