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This note details simulations of the distributional impacts of the 2009 financial crisis on households in Latvia. It uses household survey data collected prior to the crisis and simulates the impact of the growth slowdown. The simulations show that Latvia experienced a sharp rise in poverty, widening of the poverty gap, and a rise in income inequality due to the economic contraction in 2009. The 18 percent contraction in gross domestic product (affecting mainly trade hotels and restaurants, construction, and manufacturing) likely led the poverty head count to increase from 14.4 percent in 2008 to 20.2 percent in 2009. The poverty gap, which measures the national poverty deficit, was simulated to increase from 5.9 percent in 2008 to 8.3 percent in 2009. The analysis finds that the results are robust to most assumptions except post-layoff incomes, which substantially mitigated household welfare. The authors also simulate the impact of Latvia's Emergency Social Safety Net components and find that the Safety Net likely mitigated crisis impacts for many beneficiaries. The simulations measure only direct short-run impacts; hence, they do not take into account general equilibrium effects. Post-crisis income data from a different data source suggest that poverty rates increased by 8.0 percentage points between 2008 and 2009. As a result, the authors suggest that their ex-ante simulation performs reasonably well and is a useful tool to identify vulnerable groups during the early stages of a crisis.

Achieving Shared Growth --- Crisis --- Finance and Financial Sector Development --- Labor Markets --- Labor Policies --- Poverty --- Regional Economic Development --- Rural Poverty Reduction --- Simulation --- Social Development --- Social protection policies --- Latvia

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Across many low- and middle-income countries, a sizable share of young people drop out of school before completing a full course of basic education. Early warning systems that accurately identify students at risk of dropout and support them with targeted interventions have shown results and are in widespread use in high-income contexts. This paper presents impact evaluation results from an early warning system pilot program in Guatemala, a middle-income country where nearly 40 percent of sixth graders drop out before completing ninth grade. The pilot program, which was implemented in 17 percent of Guatemala's primary schools and largely leveraging existing government resources, reduced the dropout rate in the transition from primary to lower secondary school by 4 percent (1.3 percentage points) among schools assigned to the program, and by 9 percent (3 percentage points) among program compliers. Although the effect size is relatively modest, the low cost of the program (estimated at less than US$3 per student) and successful implementation at scale make this a promising and cost-effective approach for reducing dropout in resource-constrained contexts like Guatemala.

School attendance. --- Dropouts.