THE SHORT-TERM IMPACT OF UNCONDITIONAL CASH TRANSFERS TO THE POOR: EXPERIMENTAL EVIDENCE FROM KENYA

By J. Haushofer, J. Shapiro. Quarterly Journal of Economics, 2016

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We use a randomized controlled trial to study the response of poor households in rural Kenya to unconditional cash transfers from the NGO GiveDirectly. The transfers differ from other programs in that they are explicitly unconditional, large, and concentrated in time. We randomized at both the village and household levels; furthermore, within the treatment group, we randomized recipient gender (wife versus husband), transfer timing (lump-sum transfer versus monthly installments), and transfer magnitude (US$404 PPP versus US$1,525 PPP). We find a strong consumption response to transfers, with an increase in household monthly consumption from $158 PPP to $193 PPP nine months after the transfer began. Transfer recipients experience large increases in psychological well-being. We find no overall effect on levels of the stress hormone cortisol, although there are differences across some subgroups. Monthly transfers are more likely than lump-sum transfers to improve food security, whereas lump-sum transfers are more likely to be spent on durables, suggesting that households face savings and credit constraints. Together, these results suggest that unconditional cash transfers have significant impacts on economic outcomes and psychological well-being.

Subfields: Gender Studies, Safety Research, Soil Science

View Paper: https://www.semanticscholar.org/paper/261e2442f2b293c05e40d6b9d481ab32d2bcc250

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Citations in the corpus

Banking on Trust: How Debit Cards Enable the Poor to Save More (2017, background): “…by cash transfers, but also because many governments and nongovernmental organizations are already embarking on digitizing their cash transfer payments through bank accounts, debit cards, and mobile money (Aker et al., 2016; Haushofer and Shapiro, 2016; Muralidharan, Niehaus, and Sukhtankar, 2016).”
Factorial Designs, Model Selection, and (Incorrect) Inference in Randomized Experiments (2019, methodology): “Evidence from a Randomized Evaluation in Kenya The evaluation featured a factorial design with three treatments: Extra contract teacher; school-based management; and tracking (i.e., splitting classes by ability).”
A Mixed-Method Review of Cash Transfers and Intimate Partner Violence in Low- and Middle-Income Countries (2018, background): “It should be noted, however, that the Kenya Give Directly study tested lump-sum versus periodic transfers and finds that the difference did not significantly affect the magnitude or impacts on IPV (Haushofer and Shapiro 2016).”
Early Life Circumstance and Adult Mental Health (2019, background): “This study complements a growing set of studies in the development economics literature that regard economic outcomes as incomplete measurements of welfare (Devoto et al. 2012; Baird, De Hoop, andÖzler 2013; Angelucci, Karlan, and Zinman 2015; Haushofer and Shapiro 2016).”
General Equilibrium Effects of Cash Transfers: Experimental Evidence from Kenya (2019, methodology): “…of behavioral responses among treated households, including consumption, earnings, assets, food security, child growth and schooling, selfreported health, female empowerment, and psychological well-being (Haushofer and Shapiro (2016), Baird, McIntosh, and Ozler (2011), and Bastagli et al. (2016)).”