Friday, May 20, 2011

"How can we most effectively break cycles of poverty?"

A great discovery has been made in the last few years about fighting poverty. Economists have discovered that it is best to remove the barriers that keep people in poverty, instead of just giving them the stuff to get by. Many people stay in poverty due to disease, inability to grow food, little access to financial services and many similar reasons. If these people were healthy and had proper resources, research shows that they can easily climb out of poverty.

From the New York Times, the latest op-ed piece from Nickolas Kristof touches on this idea. Kristof describes some economic research that led a solutions in education and health.

Now we reach a central question for our age: How can we most effectively break cycles of poverty? For decades, we had answers that were mostly anecdotal or hot air. But, increasingly, we are now seeing economists provide answers that are rigorously field-tested, akin to the way drugs are tested in randomized controlled trials, yielding results that are particularly credible and persuasive.

Prof. Michael Kremer, a Harvard economist, helped pioneer randomized trials in antipoverty work. In the 1990s, Kremer began studying how to improve education in Africa, trying different approaches in randomly selected batches of schools.

One intervention he tried was deworming kids — and bingo! In much of the developing world, most kids have intestinal worms, leaving them sick, anemic and more likely to miss school. Deworming is very cheap (a pill costing a few pennies), and, in the experiment he did with Edward Miguel, it resulted in 25 percent less absenteeism. Even years later, the kids who had been randomly chosen to be dewormed were earning more money than other kids.

Kremer estimates that the cost of keeping a kid in school for an additional year by building schools or by subsidizing school uniforms is more than $100, while by deworming kids, the cost drops to $3.50. (In a pinch, kids can usually go to “school” in a church or mosque without a uniform.)

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