Transcript Can Technology Alleviate Poverty?

Changing behavior with social
and financial incentives
An experiment called
Sean Blagsvedt
CEO,
[email protected]
45 million bracelets
The social opportunities
of this conference
Prof Anirudh Krishna
Duke University
• How do people come to be poor?
• How do people escape from
poverty?
More: www.pubpol.duke.edu/krishna
The Good News…
Escaped Poverty
Rajasthan
(35 villages)
Gujarat
(36 villages)
Andhra
(36 villages)
W. Kenya
(20 villages)
Uganda
(36 villages)
11%
9%
14%
18%
24%
Peru
(20 communities)
17%
North Carolina
(13 communities)
23%
More: www.pubpol.duke.edu/krishna
N > 35,000 households (mostly villages)
…The Whole Story
Escaped Poverty
Became Poor
Change
11%
8%
3%
9%
6%
3%
14%
12%
2%
18%
19%
-1%
24%
15%
9%
Peru
(20 communities)
17%
15%
2%
North Carolina
(13 communities)
23%
12%
11%
Rajasthan
(35 villages)
Gujarat
(36 villages)
Andhra
(36 villages)
W. Kenya
(20 villages)
Uganda
(36 villages)
More: www.pubpol.duke.edu/krishna
N > 35,000 households (mostly villages)
Findings!
• HUGE flows in and out of poverty
– Constant creation -> persistence, some exits
• 1/3 of people not born poor
• But why did changes occur?
More: www.pubpol.duke.edu/krishna
Reasons for descent
• BAD HEALTH AND HIGH HEALTH
CARE EXPENSES
59% in Rajasthan; 73% in W. Kenya; 88% in Gujarat; 77% in Uganda; 75% in
Andhra; 67% in Peru; 41% in North Carolina
• Other location-specific reasons:
Social and customary expenses; high-interest debt; crop
disease, land exhaustion, drought; job loss
More: www.pubpol.duke.edu/krishna
Reasons for poverty escape
• Diversification of Income Sources:
Agriculture and Informal Sector
(70% Rajasthan, 73% W. Kenya, 79% Uganda, 71% Andhra, 69% Peru, 70%
Gujarat)
• OTHER REASONS (much less frequent)
Jobs – in Government and Private Sector
More: www.pubpol.duke.edu/krishna
They got other jobs
• How? They knew someone….
“Availability of an external contact, a friend or
more often a relative already established in
the city, was critical in (64% cases from
Rajasthan) for a households’ successful
break from poverty.”
- 2003 Krishna “Escaping Poverty and Becoming Poor: Who Gains, Who Loses,
and Why?”
A quote…
I am educated [to high school level] and
eager to get a job in the city, but I have no
way of knowing what jobs exist. I have no
one in the city who can find out and tell
me…
I wish I had an uncle or a cousin in [the
nearest city], who could help me, just as
Gopi Singh’s brother-in-law helped him to
find a job.
- Pratap Singh, village Khatikhera, district Bhilwara, May 16, 2002.
Many jobs are found through word of mouth.
1. Employer needs a cook and
asks her driver
3. His friend knows a cook
and tells the driver.
2. The Driver asks his friend if
she knows any cooks.
4. Driver tells Employer and
Employer hires cook.
A Story of 2 Nannies
Mary
• Edu: 5th standard
• Speaks only Kannada
• Earns $20/month
• Only knows people in
slum
Jeena
• Edu: 5th standard
• Speaks Kannada, Hindi
• Earns $170/month
• Has sister who works for
a rich family
Other job sites help high end workers –
even connect to social networks
2011
2008
2001
90 minute commute distance
But wait:
Poor people don’t
use computers
And many don’t have phones
How we digitize job seekers:
3 models
1. Do it Ourselves
– Small teams into the slum – not scalable?
– Radio/TV ad with phone-in number
2. Create business model for partners
– iCafes, NGOs, Micro-Finance cos.
– Charge seeker Rs 20 + Earn Rs 200 when hired
Payment example 1:
Employers
Job Seekers
Mentors
MFI
NGO
How we digitize job seekers:
3 models
1. Do it Ourselves
– Small teams into the slum – not scalable?
– Radio/TV ad with phone-in number
2. Create business model for partners
– iCafes, NGOs, Micro-Finance cos.
– Charge seeker Rs 20 + Earn Rs 200 when hired
3. Via Social Networks
– Orkut, babalife, FB users register job seekers
– Mentors + connectors paid
My homepage
Take-aways
• Changing human behavior through:
– Financial incentives – mobile top-ups for 3bn
people
– Social incentives – how do their friends see
their action?
• Creating market efficiency for the poor
– Aggregate data with websites
– Connect to poor w/ mobiles + on-the-ground
networks (kiva.org)
Thanks
•Sean Blagsvedt
•[email protected]
Payment example 2:
Employer
Connector
6. We
1.
2.
3.
4.
5.
Sean
Kumari
see
starts
adds
needs
searches
is
that
also
friends
out
to
Kumari
the
and
hire
as mentor
aon
later
is the
simple
babalife
someone
clicks
connector
who
registered
‘I babalife
hired
orand
between
adds
Selvi’.
pays
Selvi
user
app
babajob
Sean
on
on
orkut/facebook
Rs
and
babajob.com.
599
Selvi.
($16)
Earns
toEarns
see
Rs 100.
mobile
another
#s or
Rs
200post a job
Employee
Mentor
Stages of Progress (Rajasthan)
1. Food for the family
2. Send children to school
3. Some clothes to wear outside the house
Poor
4. Start repaying debts
5. Repair the existing shelter
6. Dig a well
7. Purchase cows and buffaloes
Not Poor
8. Construct a pakka (brick) shelter
9. Purchase ornaments
10. Radio, tape recorder, refrigerator
11. Motorcycle
12. Tractor, car
More: www.pubpol.duke.edu/krishna
Rich
Babajob payment example # 2
Employer
Connector
Employee
Connector
Mentor
NGO
Babajob summary
•
•
•
•
•
Beta-launched Sept 2007. Bangalore-only
10,500 registered users
4500 active job seekers
~150 placements + paid employers
India-wide launch + social network launch
– late April