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Microloans Work Best With Proven Entrepreneurs

1,000 rupees = approx. $14 USD

Source: National Bureau of Economic Research

Microcredit programs are more effective when the money is lent to people who have greater entrepreneurial acumen/have prior business experience, according to a National Bureau of Economic Research (NBER) study on the long-term impact of a microlending program in India.

The program “had strong positive effects for households that were already engaged in what they call ‘gung-ho’ entrepreneurship and almost no effect for others,” the researchers found after studying 52 Hyderabad neighborhoods receiving loans from lender Spandana between 2006 and 2016.

Some used the loans to hire employees or invest in their business, while others paid off other loans or put the money toward their business on a less ambitious scale, researchers found. 

“The majority of business growth associated with microcredit comes from a small share of firms. Their growth generates employment opportunities for others who might otherwise become ‘reluctant’ entrepreneurs,” NBER wrote in its summary of the research. 

10.5% of U.S. households faced food insecurity in 2020. Unchanged from 2019.

Source: BRINK

The Pandemic Didn’t Lead to an Increase of Food-Insecure Households In the U.S.

Despite a global pandemic, the amount of U.S. households facing food insecurity was stable throughout 2020. A recent report (pdf) by the USDA found that 89.5% of American households were food-secure last year, unchanged from 2019. 

Among the 10.5% of households that did face food insecurity, 5.1 million households (3.9% of the toal) faced very low food security — where members “experienced reduced food intake and disrupted eating patterns at times during the year because of limited money and other resources for obtaining food.” Households with children faced a disproportionate amount of food insecurity when compared to 2019, however. About 7.5% of U.S. households with children faced food hardships in 2020 — up from 6.5% in 2019.

The fact that the food-insecure population held steady during a global pandemic shows the impact of U.S. social safety nets, which helped vulnerable populations weather the storm, as well as private relief efforts like charitable food donations.

 

The Results of Germany’s Federal Election

The results of the German Federal Election

According to German media outlets, the Social Democratic Party (SPD) led by Olaf Scholz has won the largest share of votes in Sunday’s election, narrowly beating Armin Laschet, the new leader of the CDU, the party of Chancellor Angela Merkel, and its partner the CSU.

No party has won enough votes to form a government on its own, so there will need to be a coalition, which will be the subject of intense negotiations for several weeks. According to BRINK columnist Alex Privitera, the most likely outcome is “a coalition between the Social Democrats, the Greens, and the market-friendly Free Democrats (FPD) — without the Christian Democrats.”

But much will depend on “whether an understanding can be reached about the role of government in accelerating the transition toward a greener economy.”

Too Much Free Time May Be Almost As Bad As Too Little

Source: American Psychological Association

Having too much free time can be detrimental to a person’s well-being, according to a study published by the American Psychological Association. Much has been discussed regarding balancing work and free time, but the benefits apply only to a point.

Researchers from the University of Pennsylvania and UCLA analyzed data from the American Time Use Survey, conducted from 2012-2013, and found that the beneficial effects of free time on a person’s well-being began declining at around 5 hours. They also found that those who were asked to imagine a day with 7 hours of free time reported a lower satisfaction level than those imagining a day with 3 hours per day of free time.

The key to workers’ happiness is the feeling of being productive. Those who spent their time in a productive way (e.g., working out or doing hobbies,) reported a higher level of well-being than those who used it in an unproductive way (e.g., watching T.V.) Furthermore, the amount of free time spent socializing led to a higher well-being rate than free time spent alone.

Public Views of US Business Sectors Are Plummeting

Americans rated U.S. business industries at their lowest points since 2011 during the COVID-19 pandemic. The average record-low, according to Gallup, was during the 2008 Great Recession at 34% — just five percentage points lower than the current average of 39%.

Of the 25 industries ranked, the federal government, the most negatively rated industry since 2014, was again viewed the most negatively by the American public at 31%, followed by the oil and gas and pharmaceutical industries. This year, Americans rated a mere four industries positively — farming and agriculture at 59%, restaurants at 58%, the grocery industry at 54% and the computer industry at 51%. In the past three years, farming and agriculture and the restaurant industry were the top-ranked sectors.

Public sentiment toward certain sectors is related to how they responded to the pandemic, states Gallup. However, as a whole, the public has trusted businesses more than other institutions during the pandemic.

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