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June 26, 2015

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Posted: 26 Jun 2015 12:06 AM PDT

'Please Stop Hurting Poor People With Your Skills Training Programs'

Posted: 25 Jun 2015 10:44 AM PDT

 Chris Blattman:

Dear governments and aid agencies: Please stop hurting poor people with your skills training programs: Here is an incredible number: From 2002 to 2012 the World Bank and its client governments invested $9 billion dollars across 93 skills training programs for the poor and unemployed. In lay terms, that is a hundred freaking million dollars per program.
Unfortunately, these skills probably did very little to create jobs or reduce poverty. Virtually every program evaluation tells us the same thing: training only sometimes has a positive impact. Almost never for men. And the programs are so expensive—often $1000 or $2000 per person—that it's hard to find one that passes a simple cost-benefit test.
You might think to yourself: That's not so bad. Nobody hurt the poor. Plus the trainers and the firms probably benefited. So it's not a total loss. If you think this, I urge you to transfer to an organization where you can no longer affect the world. I can think of a couple UN agencies with excellent benefits.
Because when you take billions of dollars a year (because the World Bank is hardly the only spender on skills programs) and you spend them on vocational bridges to nowhere, you have denied those dollars to programs that actually work: an anti-retroviral treatment, a deworming pill, a cow, a well, or a cash transfer. You have destroyed value in the world. ...
If you're thinking to yourself "hey, I would like to read 20,000 more words on this, preferably in dry prose," well do I have the paper for you. A new review paper with Laura Ralston: Generating employment in poor and fragile states: Evidence from labor market and entrepreneurship programs. ...
Fortunately the paper includes a 4-page executive summary. And, even better, an abstract!...

'Breaking Greece'

Posted: 25 Jun 2015 09:44 AM PDT

Paul Krugman:

Breaking Greece: I've been staying fairly quiet on Greece... But given reports from the negotiations in Brussels, something must be said...
This ought to be a negotiation about targets for the primary surplus, and then about debt relief that heads off endless future crises. And the Greek government has agreed to what are actually fairly high surplus targets, especially given the fact that the budget would be in huge primary surplus if the economy weren't so depressed. But the creditors keep rejecting Greek proposals on the grounds that they rely too much on taxes and not enough on spending cuts. So we're still in the business of dictating domestic policy.
The supposed reason for the rejection of a tax-based response is that it will hurt growth. The obvious response is, are you kidding us? The people who utterly failed to see the damage austerity would do — see the chart, which compares the projections in the 2010 standby agreement with reality — are now lecturing others on growth? Furthermore, the growth concerns are all supply-side, in an economy surely operating at least 20 percent below capacity. ...
At this point it's time to stop talking about "Graccident"; if Grexit happens it will be because the creditors, or at least the IMF, wanted it to happen.

'Personal Income increased 0.5% in May, Spending increased 0.9%'

Posted: 25 Jun 2015 09:37 AM PDT

Calculated Risk:

Personal Income increased 0.5% in May, Spending increased 0.9%, by Bill McBride: The BEA released the Personal Income and Outlays report for May:

Personal income increased $79.0 billion, or 0.5 percent ... in May... Personal consumption expenditures (PCE) increased $105.9 billion, or 0.9 percent.
Real PCE -- PCE adjusted to remove price changes -- increased 0.6 percent in May, compared with an increase of less than 0.1 percent in April. ... The price index for PCE increased 0.3 percent in May, compared with an increase of less than 0.1 percent in April. The PCE price index, excluding food and energy, increased 0.1 percent in May, the same increase as in April.

The May price index for PCE increased 0.2 percent from May a year ago. The May PCE price index, excluding food and energy, increased 1.2 percent from May a year ago.

...The increase in personal income was higher than expected.  And the increase in PCE was above the 0.7% increase consensus.  A strong report. ...This suggests a rebound in PCE in Q2, and decent Q2 GDP growth.

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