Conditional Cash Transfers for Education in Morocco


Conditional Cash Transfers (CCTs) have been shown to increase investments in education and health, but their standard features make them expensive. Researchers conducted a randomized evaluation of a cash transfer program in Morocco to estimate the impact on attendance and enrollment of a “labeled cash transfer” (LCT): a small cash transfer made to parents of school-aged children in poor rural communities, not conditional on school attendance but explicitly labeled as an education support program. The program led to large gains in school participation and adding conditionality and giving cash transfers to mothers rather than fathers made almost no difference.
 
Policy Issue: 
Around the world, conditional cash transfer (CCTs) programs have been shown to influence households’ investment decisions regarding education and increase school attendance and educational attainment. One potential drawback of CCTs, however, is that two of their standard features, targeting—the process of defining and identifying eligible recipients—and conditionality—the requirement that recipients take certain actions, such as sending their children to school in order to receive the transfer—make them expensive to administer. Moreover, targeting and conditionality can also lead to the exclusion of the poorest segments of the population; targeting systems have been shown to be imperfect, often excluding many poor households; and conditionality means that those who cannot meet the conditions do not receive any benefit. While there is evidence that conditionality increases attendance, it is unclear how stringent the conditions must be. Can a cash transfer that encourages school enrollment without an explicit attendance requirement provide the small nudge necessary to increase educational achievements among disadvantaged communities?
 
Context of the Evaluation: 
Morocco is a lower middle income country: it’s GDP per capita was about $3,000 in 2011. Education levels in the general population are relatively low and in 2011only about 56 percent of the adult population was literate. While the national primary school enrollment rate is high, the rural primary school completion rate was still below 60 percent in 2008. In order to address these issues, the Moroccan Higher Council of Education (CSE) together with the National Ministry of Education (MEN) launched a nation-wide cash transfer program to encourage parents to keep their children enrolled in school.
 
Details of the Intervention: 
Researchers partnered with the Government of Morocco to evaluate the Tayssir program, a two-year pilot designed to increase student participation in primary school. Tayssir, which means “facilitation” in Arabic, made cash payments to parents in program communities with children aged 6 to 15. Parents had to formally enroll each of their children into the program. The pilot took place in 320 rural primary school sectors in the poorest areas within five of Morocco’s sixteen regions. The Tayssir pilot included two versions of the program:
 
Labeled cash transfer (LCT):  In this version of the program, families with children of primary school age could receive transfers whether or not their children attended school. In practice, since enrollment in the Tayssir program happened at schools, children enrolled in Tayssir were automatically registered and enrolled in school at the same time, but the transfers were not conditional on continued enrollment. The monthly amount per child increased as each child progressed through school, starting from US$8 for each child in grades 1 and 2 and increasing to US$13 for children in grades 5 and 6. The average transfer amount represented about 5 percent of the average household’s monthly consumption, which is small compared to a range of 6 to 27 percent for existing CCTs in middle-income countries.
 
Conditional cash transfer (CCT): In this version of the program, cash transfers were disbursed to parents of primary school-age children, as long as their child did not miss school more than four times each month.  The monthly transfer amounts were the same as those in the LCT program.
 
What’s more, in order to determine if the effectiveness of the transfers depends on the gender of the parent who received the transfer (the child's mother or father), in half of the school sectors sampled for Tayssir, mothers (the recipients in almost all CCT programs to date) received the transfers; while fathers received the transfers in the other half.
 
Thus, each school sector sampled for the study was randomly assigned to one of five groups:
  • LCT to father group (40 school sectors, 80 communities sampled for study)
  • LCT to mother group (40 school sectors, 80 communities sampled for study)
  • CCT to father group (90 school sectors, 180 communities sampled for study)
  • CCT to mother group (90 school sectors, 180 communities sampled for study)
  • Comparison group: no transfers (60 school sectors, 120 communities sampled for study)
Researchers collected information on student attendance and enrollment status for over 47,000 primary school aged children through unannounced visits to all schools. Comprehensive baseline and endline surveys gathered data on around 4,400 households. At endline a basic test was administered to measure arithmetic performance of one child per household. Finally, awareness surveys were administered mid-course to measure teachers’ and parents understanding of the program. 
 
Results & Policy Lessons:
Geographical targeting, by removing any ambiguity on eligibility, allowed for large program take-up. Around 97% of the study households in either the LCT or CCT communities had at least one child enrolled. Compliance with the random assignment of the gender of the transfer recipient was very high: it was close to 89% on average in schools where mothers had been designated as recipients, and around 80% in schools where fathers had been.
 
In terms of school participation, the Tayssir cash transfers had large impacts under all versions of the program, with slightly larger impacts for the LCT. After two years, the dropout rate among students enrolled in school at the start of the program in LCT schools was about 7 percentage points lower than the dropout rate of comparison schools (at 10 percent), a 70 percent decrease. Re-enrollment of those who had dropped out of school before the program almost doubled in LCT schools as compared to comparison schools, and the share of students who never enrolled in school fell by 43 percent. Performance on a basic arithmetic test improved but not significantly.
 
There was no difference in impacts between transfers issued to fathers and transfers issued to mothers. Making cash transfers conditional did not improve the effectiveness of the program either. If anything, it somewhat reduced it: relative to LCT schools, CCT schools had a slightly higher drop-out rate. Among students who were not enrolled at the start of the program, re-enrollment in CCT schools was lower than re-enrollment in LCT schools, perhaps because conditionality discouraged some households or teachers from enrolling weaker children in the program. That said, the rules of the program were overall poorly understood by local communities. After one year, in the CCT groups, only about half of parents interviewed knew transfers were conditional; in the LCT groups, only about half of parents interviewed knew transfers were unconditional. A weak understanding of what households must do to qualify for the cash transfer naturally weakens the potential for conditionality to matter.
 
The finding that adding conditionality or directing the cash transfers to mothers did not increase the program’s impact on student attendance or school enrollment is important. It likely is because the Tayssir program was framed as an educational support program, and perceived as an endorsement of the local schools, since headmasters were responsible for enrolling families. Data from the household surveys provides evidence that Tayssir, in all forms, increased parents’ belief that education was a worthwhile investment.
 
Overall, the results of the Tayssir experiment suggest that in some contexts unconditional but labeled transfers targeted at poor communities can provide parents with the small nudge necessary to increase attendance. This “nudge” is relatively cheap, due to both small transfers per child and small administrative costs. 

Girls Scholarship Program in Kenya

Approximately 85% of primary school age children in western Kenya are enrolled, however only about one-third of students finish primary school. Dropout rates are typically higher for girls. Results suggest that the Girls Scholarship Program led to persistent test score gains in pupils from treatment schools five years after the program. Girls from treatment schools were also more likely to be enrolled in school and to have attended some secondary school at the time of the long-term follow up survey.

 
Policy Issue: 

In many education systems, those who perform well on exams covering the material of one level of education receive free or subsidized access to the next level of education. Such merit-based scholarships are attractive to the extent that they can induce greater student effort, assuming that pupils are motivated to strive for scholarship opportunities. However, the role of student motivation in improving education outcomes is relatively poorly understood. Policymakers have frequently focused their attention on increasing school inputs or improving teacher attendance, assuming that students are motivated to take advantage of these improvements. Merit-based scholarships for girls may offer an alternative to increase female education, and more educated women tend to have healthier children and higher incomes. However, the assumption that pupils are inherently motivated to pursue education, and the effect that educational opportunities can have on female learning, are relatively unexplored.

 
Context of the Evaluation: 

Approximately 85 percent of primary school age children in western Kenya are enrolled in school, but only about one-third of students finish primary school. Dropout rates are typically higher for girls; in 2001 the 6th grade dropout rate was 10 percent for girls and 7 percent for boys among students in this study’s comparison schools at baseline. Primary schools charge fees to cover their non-teacher costs, including textbooks for teachers, chalk, and classroom maintenance (approximately US$6.40 per family per year). There are also additional fees for school supplies, textbooks, uniforms, and activities such as taking exams, and these costs may deter parents from sending children, especially daughters, to school. This project was introduced in part to assist families of high-achieving girls to cover these costs.

 
Details of the Intervention: 

The Girls’ Scholarship Program (GSP) was carried out by International Child Support (ICS) Africa, in two rural Kenyan districts, Busia and Teso. Out of a set of 127 schools, 64 were randomly invited to participate in a program which gave merit-based scholarships to 6th grade girls who scored in the top 15 percent on tests administered by the Kenyan government. For the next two years, winning girls received: (1) a grant of US$6.40 to cover school fees, paid to her school; (2) a grant of US$12.80 for school supplies paid directly to her family; and (3) public recognition at a school awards assembly held for students, parents, teachers and local government officials.

Academic achievement was captured in test scores, which are likely to be a good objective measure, and was not significantly affected by cheating. Exams in Kenya are administered by outside monitors, and district records from those monitors have no documentation of cheating. 

 

Results and Policy Lessons: 

Implementation: Poor existing attitudes towards outside intervention and an educationally disadvantaged population meant that some schools in the Teso district were resistant to the program. Particularly, stronger indigenous religious beliefs and a tradition of suspicion of outsiders caused implementation difficulties, which may have reduced program effectiveness there.

Test Score Effects: The program raised test scores by 0.19 standard deviations for girls enrolled in schools eligible for the scholarship. These effects were strongest among students in Busia, where the program increased scores by 0.27 standard deviations. There are no effects found in Teso. Large positive test score gains were also found among Busia girls with low chances of winning the award, suggesting that there were positive externalities on learning. The average program effect for girls corresponds to an additional 0.2 grades worth of primary school learning, and these gains persisted one full year following the competition. There is also evidence of positive program externalities on the entire class; boys (who were ineligible for the awards) saw scores increase by 0.08 standard deviations on average. 

Student Attendance: While the program impact on school participation is nearly zero among girls in the pooled Busia and Teso sample, the impact in Busia is positive at 3.2 percentage points. This corresponds to about a one-quarter reduction in school absenteeism.

Teacher Attendance: The program had a large impact on overall teacher attendance; in the pooled Busia and Teso sample there was a 4.8 percentage point increase in overall teacher attendance, and if these attendance gains were concentrated only among 6th grade teachers then this would imply a 7.6 percentage point increase in attendance. Once again, effects were larger in Busia—the impact on overall teacher attendance there was 7.0 percentage points, roughly halving overall teacher absenteeism. Teachers could potentially be gaming the system by diverting their effort towards students eligible for the program, but there is no difference in how often girls are called on in class relative to boys in the program versus comparison schools, indicating that program school teachers probably did not substantially divert attention to girls. This finding suggests that greater teaching effort was directed to the class as a whole.

Merit Scholarships and Inequality: The scholarship award winners did tend to come from relatively advantaged households, raising concerns about the distribution of benefits from this program. But in terms of student test score performance, the positive externalities affected all students, and were not concentrated amongst the most privileged. 

Parental Involvement Effects: Anecdotal evidence from teacher interviews suggests greater parental monitoring occurred in Busia as a result of the program. One Busia teacher mentioned that parents began to “ask teachers to work hard so that [their daughters] can win more scholarships.” Another Busia teacher asserted that parents visited the school more frequently to check up on teachers, and to “encourage the pupils to put in more efforts.” When teachers were asked to rate local parental support for the program, 90 percent of Busia teachers claimed that parents were either “very” or “somewhat positive;” in Teso the analogous rate was only 58 percent. Thus, the greater improvements in both student and teacher attendance and performance in Busia as compared to Teso suggest that merit scholarships are most effective in the presence of local parental accountability and involvement, either formal or informal. 

Ultra Poor Graduation Pilot in Honduras

Can an intensive package of support lift the ultra poor out of extreme poverty to a more stable state? This 24-month program provides beneficiaries with a holistic set of services including: livelihood trainings, productive asset transfers, consumption support, savings plans, and healthcare. By investing in this multifaceted approach, the program strives to eliminate the need for long-term safety net services. Spanning seven countries on three continents, the Ultra Poor Graduation program is being piloted around the globe. IPA is conducting randomized evaluations in IndiaPakistanHondurasPeruEthiopiaYemen, and Ghana to understand the impact of this innovative model.

Policy Issue:<--break->
Governments have often attempted to address the needs of the ultra poor by offering consumption support that is costly and offers no clear pathway out of food insecurity. The Ultra Poor Graduation Pilots attempt to apply a model, developed by BRAC in Bangladesh, which recognizes that the ultra poor need the "breathing space" that is provided by temporary consumption support, but that public funds may be better used to build households’ capacities to maintain a sustainable livelihood. The idea is that this initial assistance, lasting two years, will place households securely on the first rung of the development ladder, which they can then climb with the help of appropriate development strategies. The model incorporates a comprehensive package of services: a productive asset (such as chickens or goats), consumption support, livelihood trainings, healthcare, and financial services. Ideally this wide set of support services will help households to weather any shocks they may face along during their climb out of ultra poverty.
 
This project is a part of a set of evaluations, in partnership with CGAP and the Ford Foundation, that intends to determine whether the model, pioneered in Bangladesh, is effective in a range of contexts. 
 
Context:
As the second poorest country in Central America, Honduras suffers from a disparate distribution of wealth with about 60% of its population living below the poverty line[1]. The economy is centered around exports such as bananas and coffee, crops that are susceptible to weather fluctuations.   To aid households struggling to generate income, ODEF and Plan Honduras have joined together to implement the Mejoramiento Integral de la Familia Rural (MIRE).
 
Description of Intervention:
Ultra Poor households earning less than 600 Lempiras (about $30 US) each month are identified with a Participatory Wealth Ranking (PWR) during which villagers rate the economic status of all members of the community.  Eligible households are randomly assigned either a treatment or comparison group.  Treatment households receive consumption support in the form of a family garden  and training in two income generating activities including raising livestock (chicken or pigs) and growing crops (bananas or vegetables) production, or operating a pulperia (small grocery store). Participants are monitored throughout the process. 
 
Female heads of households are required to open a savings account at ODEF and are randomly assigned to one of two savings treatments.  One savings group is incentivized with savings matching biannually equal to 50% of the average account balance while a second treatment group receives monthly direct savings transfers. Both of these treatment groups receive savings incentives valued at 400 Lempiras (about $20 US).
 
By comparing ultra poor households in treatment villages who do not receive the program with those in pure comparison villages, the study is designed to measure spillover effects. IPA is also conducting qualitative research, consisting of interviews on life histories, family dynamics, and cultural traditions, to better understand the mechanisms by which the program functions.
 
Results:
Forthcoming.
 
For additional information on the Ultra Poor Graduation Pilots, click here.
 
[1]CIA, “World Fact Book” 

Ultra Poor Graduation Pilot in Peru

Can an intensive package of support lift the ultra poor out of extreme poverty to a more stable state? This 24-month program provides beneficiaries with a holistic set of services including: livelihood trainings, productive asset transfers, consumption support, savings plans, and healthcare. By investing in this multifaceted approach, the program strives to eliminate the need for long-term safety net services. Spanning seven countries on three continents, the Ultra Poor Graduation program is being piloted around the globe. IPA is conducting randomized evaluations in IndiaPakistanHondurasPeruEthiopiaYemen, and Ghana to understand the impact of this innovative model.

Policy Issue: 

Governments have often attempted to address the needs of the ultra poor by offering consumption support that is costly and offers no clear pathway out of food insecurity. The Ultra Poor Graduation Pilots attempt to apply a model, developed by BRAC in Bangladesh, which recognizes that the ultra poor need the "breathing space" that is provided by temporary consumption support, but that public funds may be better used to build households’ capacities to maintain a sustainable livelihood. The idea is that this initial assistance, lasting two years, will place households securely on the first rung of the development ladder, which they can then climb with the help of appropriate development strategies. The model incorporates a comprehensive package of services: a productive asset (such as chickens or goats), consumption support, livelihood trainings, healthcare, and financial services.Ideally this wide set of support services will help households to weather any shocks they may face along during their climb out of ultra poverty.

This project is a part of a set of evaluations, in partnership with CGAP and the Ford Foundation, that intends to determine whether the model, pioneered in Bangladesh, is effective in a range of contexts.

Context of the Evaluation: 

The study takes place in rural communities of the Canas and Acomayo provinces in the Department of Cusco, Peru.  To assist ultra poor households with young children in the region, Juntos, a government-run conditional cash transfer program, provides families with a monthly stipend. Arariwa and Plan, the project partners, are implementing the Graduation Model in concert with the Juntos program.

Details of the Intervention:

The project team will use a Participatory Wealth Ranking (PWR) to target the ultra poor in the chosen provinces. As overlap is expected between the Ultra Poor Graduation project beneficiaries and Juntos beneficiaries, the project will provide a nine-month cash stipend equivalent to US$35 to those not already receiving it from Juntos.

This program will then build on the base of the Juntos program by providing all beneficiary households with a productive asset, which over two years, they will be trained to manage. During this time period, beneficiaries will be monitored with weekly visits intended to contribute to the holistic development of the family's economic potential. A microfinance promoter will also encourage beneficiaries to save in group mechanisms. At the end of the two year period, Arariwa will offer microcredit products to the beneficiary families that demonstrate characteristics of reliable clients.

In total, 80 communities will participate in the study. Three groups will be defined within these communities:

(A) Treatment households: an average of 20 treatment households will be selected in each of 40 treatment communities.
(B) Neighbors: an average of 20 comparison households will be selected from each of the same 40 treatment communities, for comparison against their neighbors who received the treatment.
(C) Comparison households: an average of 20 comparison households will be selected in each of 40 comparison communities.

The impact of the program can be assessed by comparing groups A and B or by comparing groups A and C. The two comparisons will give different answers if spillover effects are present.

Results:

Results forthcoming.

For additional information on the Ultra Poor Graduation Pilots, click here.

Testing the Effectiveness of Payments for Ecosystem Services to Enhance Conservation in Uganda

Policy Issue:

Deforestation contributes as much as 25 percent  of global greenhouse-gas emissions each year. Curbing deforestation in developing countries is potentially a very cost-effective way to reduce carbon emissions and address climate change. Recently, the United Nations launched a major initiative to pay developing countries for reduced deforestation. The program, known as REDD+ (Reducing Emissions from Deforestation and Degradation), may be incorporated into global carbon markets under the next international climate treaty, resulting in billions of dollars in payments from wealthier countries for forest conservation. However, despite growing interest and investment in reducing deforestation, surprisingly little research has been conducted on the most cost-effective ways to do so. One popular policy approach is payments for ecosystem services (PES), where participants receive payments if they comply with a set of conditions that are protective of the environment, such as refraining from cutting down trees on their land. PES programs are increasingly popular because of their perceived simplicity in comparison to alternative conservation interventions. It is important to evaluate this and other types of emission reduction interventions in order to determine the most cost-effective way of reducing carbon emissions.

Context of the Intervention:

Forest loss in Uganda is estimated to be about 2 percent per year, with an even higher rate on private land.[i] The project is based in the districts of Hoima and Kibaale, which are located in the equatorial zone of western Uganda, and have some of the highest deforestation rates in the country. These districts are predominantly rural, with a population density of about 97 persons/km2 and a combined population of around 750,000 inhabitants.  

While the environmental effects of deforestation are not limited to a particular portion of the population, the PES project is specifically targeted at private landowners who have forests on their land since they are the population with ownership rights over local forests and can decide whether or not to clear trees from their land. Forest owners might cut trees to clear land for growing cash crops such as tobacco and rice or to sell the trees as timber or for charcoal production. Cutting down trees provides the landowners with income, but is a threat to carbon storage as well as the survival of local wildlife (particularly the endangered chimpanzee population).

Description of the Evaluation:

One hundred forty villages in the Hoima and Kibaale districts of Uganda were randomly assigned to either the treatment or the comparison group. In the treatment villages, Chimpanzee Sanctuary and Wildlife Conservation Trust (CSWCT) staff members offered an incentive contract to each individual landowner, under which they will receive annual payments if they meet certain terms. Landowners are required to refrain from cutting trees on their land (with some exceptions built into the contract) and also to re-forest a portion of the land.  CSWCT employees monitor compliance with the contract by conducting random spot checks in the forest to look for things like newly cleared patched or fresh tree stumps.

The study will measure social and economic welfare as well as environmental outcomes, and will be linked with satellite imagery that assesses spatial patterns of forests.

Results and Policy Lessons:

Results forthcoming.

Read more about this research in blog posts by researcher Seema Jayachandran, here and here


[i] National Environment Management Authority (NEMA) Uganda. “National State of Environment Report for Uganda 2007/2008”

The Impact of Smartcard Electronic Transfers on Public Distribution

Advances in payments technology have the potential to improve the efficiency of slow and corrupt public welfare programs. Researchers tested how Smartcards, which coupled electronic transfers with biometric authentication, affected the functioning of two government welfare schemes in India. They found that even though the new Smartcard system was not fully implemented, it resulted in a faster and less corrupt payments process without adversely affecting program access. Investing in Smartcards was cost-effective, and beneficiaries overwhelmingly approved the new payment system.
 
Policy Issue 
 
State-sponsored welfare programs are often constrained by corruption and inefficiency. The problem is of particular concern in India, where by some measures, only 15 percent of spending on social programs actually reaches the intended beneficiaries. Such corruption strains state finances and reduces the potential impact of government programs. Transferring benefits through payment systems that use biometric authentication to verify recipients’ identities may help address these challenges. Secure electronic transfers may reduce financial leakages, transaction costs, and time spent accessing payments. However, reducing one form of corruption may simply displace it into other areas, and switching to electronic payments may also limit participation if beneficiaries do not register for biometric cards, if they lose their cards, or if technical challenges prevent them from receiving payments.  
 
Evaluation Context
 
In India, there is widespread interest in using new payments technologies to improve the performance of public welfare programs and increase financial inclusion. In 2009, the national government launched an ambitious initiative, called Aadhaar, to give all 1.2 billion residents unique, biometric IDs, and then make payments to beneficiaries of social programs via bank accounts linked to these IDs.
 
Some state governments have developed their own electronic transfer systems alongside the national identification project. In 2006 , the Government of Andhra Pradesh, in southeast India, started an initiative to shift towards using "Smartcards" to transfer government benefits to the poor. While the government intends to eventually use Smartcards for a wide range of programs, it piloted their use with two large social welfare schemes: the Mahatma Gandhi National Rural Employment Scheme (NREGS)—which guarantees rural households 100 days of paid employment per year—and Social Security Pensions (SSP)—which makes monthly payments to elderly, widowed, and disabled individuals. In 2010, facing several logistical challenges, the government decided to restart the program in eight districts where the Smartcards had yet to be rolled out. These eight districts, which are spread throughout the state, have a combined rural population of about 19 million people. 
 
Description of the Intervention 
 
Researchers used a randomized evaluation to assess the impact of Smartcards on leakages in NREGS and SSP, and the welfare of program beneficiaries. Researchers partnered with the Government of Andhra Pradesh to randomize the roll out of the program in the eight districts that had not yet received Smartcards in three waves over two years. The Smartcard program was introduced in 113 mandals (sub-districts) in the first wave, 195 mandals in the second wave, and the remaining 45 mandals in the third wave. The analysis compared the first wave to receive the program with the third wave of mandals, where Smartcards were not introduced until after the final survey.
 
The program introduced two major changes to the existing payment system: it required beneficiaries to biometrically authenticate their identity before collecting payments, and it delivered payments through a Customer Service Provider (CSP) in each village, rather than at a more distant post office. When beneficiaries enrolled in the Smartcard program, their fingerprints and a photograph were taken, and they were issued a bank account and a Smartcard, which contained a chip storing the biometric and bank account information.
 
In order to collect a payment, beneficiaries visited the local CSP, who was usually a secondary school-educated woman from a traditionally disadvantaged caste who resided in the village. The CSP kept a small device which could read the beneficiary’s fingerprint and match it with the details stored in the Smartcard. If the match was successful, the CSP disbursed cash and the authentication device printed a receipt.
 
Results
 
Researchers found that the Smartcard program reduced the time it took beneficiaries to receive payments, reduced leakages, and increased beneficiary satisfaction, even though it was not fully implemented. 
 
Take-up: After two years, about 81 percent of villages in the first wave of the program rollout had installed the Smartcard-based payment system for NREGS and 86 percent had adopted it for SSP. In villages where the new payments system was available, about 65 percent of payments were made to beneficiaries with Smartcards, meaning that just over 50 percent of all payments in treatment areas were made using the new system.
 
Payment time: In areas assigned to adopt the Smartcard payment system, the amount of time NREGS beneficiaries spent collecting payment fell by 21 minutes (a 19 percent reduction from 112 minutes). The system also reduced the lag between working on an NREGS project and collecting payment by about seven days (a 21 percent reduction from 34 days). There was no significant effect on the amount of time SSP beneficiaries waited to collect their payments, but unlike NREGS payments, these payments were delivered at the village-level prior to the adoption of Smartcards. 
 
Leakages: NREGS recipients in areas assigned to receive the Smartcard system reported weekly earnings that were Rs. 35 higher (a 24 percent increase from Rs. 146). However, there were no major impacts on the amount the government spent on the NREGS program, suggesting a reduction in leakages. There was no significant impact on earnings for SSP beneficiaries, as these benefits were fixed, but there was a 1.8 percentage point reduction in the incidence of bribes demanded for disbursing payment (a 47 percent reduction from 3.8 percent). 
 
Beneficiary satisfaction: In surveys, 84 percent of NREGS beneficiaries and 91 percent of SSP beneficiaries preferred Smartcards to the status quo. However, many recipients feared losing their Smartcards (53 percent of NREGS beneficiaries and 62 percent of SSP beneficiaries) or reported having problems with the authentication device (49 percent of NREGS beneficiaries and 59 percent of SSP beneficiaries).
 
Cost effectiveness: Researchers estimated the value of the time beneficiaries spent collecting payments and found that the value of time savings to beneficiaries (US$4.44 million) was approximately the same as the cost of the new system (US$4.25 million) for NREGS. Although the cost savings were less substantial for SSP (US$320,000, with system costs of US$1.85 million), these calculations suggest that the times savings to beneficiaries alone can sometimes justify the costs of implementing improved payments technologies. On top of these pure efficiency gains, there was an estimated $38.7 million reduction in annual leakage.
 

Improving the Design of Conditional Transfer Programs: Evidence from a Randomized Education Experiment in Colombia

Policy Issue: 
Over the past decade many developing countries have expanded primary school access, energized by initiatives such as the United Nations Millennium Development Goals, which call for achieving universal primary education by 2015. High student absenteeism is a considerable challenge, however, since families can face many barriers and opportunity costs in sending their children to school. School enrollment issues are thought to be more pronounced among girls, low income families and older children. Despite the importance of education, academics and policy makers are still far from understanding what determines whether or for how long children are educated. Conditional cash transfer programs have proven effective at improving education outcomes in some settings (notably Mexico's PROGRESA/Oportunidades program); however their impact on other goals and in other environments may be very different
 
Context of the Evaluation: 
Colombia is a relatively typical middle-income, Latin American country. Child mortality is relatively low at 21 per 1,000 births, and only 18 percent of the population lives on less than two dollars a day. Similar to many middle-income countries, school attendance in Colombia is close to 100 percent for younger children, but declines substantially after the age of 13. Average attendance is 92 percent among 15 year olds, 90 percent among 16 year olds, and 80 percent among 17 year olds. The drop is considerably faster for low-income individuals: by age 17 the attendance rate falls to 65 percent in this group. Moreover, in 2003, individuals from the bottom of the Colombian poverty index represented nearly 74 percent of those not properly enrolled in school. The primary reason cited for dropping out is the cost of education. Students must pay to enroll each year and pay for required items like uniforms, books, and supplies. Monthly education costs fluctuate between US$13 and US$22 – a relatively large expense considering that the poorest families in Bogota earn less than US$750 a year.
 
Details of the Intervention: 
In 2005, the city of Bogota established the Conditional Subsidies for School Attendance (“Subsidios Condicionados a la Asistencia Escolar”) program in an effort to improve student retention, lower drop-out rates and reduce child labor. Three different incentive structures for a new conditional cash transfer system (Subsidios) were piloted in two localities within the city:
 
Basic model: Participants received US$15 per month, conditional on the child attending school at least 80 percent of the required days that month. The total annual value of the transfer (US$150) is three times more than students’ reported average labor market earnings, and is slightly more than the average annual reported education expenditure (US$125). Students were removed from the program if they failed to reach the next grade twice, failed to meet the attendance target in two successive periods, or were expelled from school.
 
Savings treatment: This variant alters the timing of cash transfers by saving a portion of the monthly stipend on a bank account to be paid out at once. The monthly US$15, which is still conditional on an 80 percent attendance rate, is split into a direct payment of US$10 and a ‘savings’ component of US$5 which is held in a bank account. The accumulated funds are made available to families at the end of the year, just before enrollment for the subsequent grade level. This one-time payment of accumulated savings is unconditional on further attendance rates, i.e. once a child has met the attendance target in one month, the banked US$5 will be paid to the family at the end of the year regardless of attendance in future months. This structure creates a mechanism for families to save money for annual enrollment costs which might otherwise be an obstacle to students’ continuing from one grade level to the next.
 
Tertiary treatment: In addition to providing an incentive to attend school, this treatment provided incentives to graduate and then to matriculate to a higher education institution. Like in the savings treatment, in the short term, the monthly subsidy is reduced from US$15 to $10. However, upon graduating, students earned the right to receive a transfer of US$300, equivalent to 73 percent of the average cost of a year at vocational school, if they enrolled in a higher educational institution within one year.
 
Results and Policy Lessons: 
By conducting two different experiments, this research finds that changing the structure of cash transfer programs can have a significantly different effect on enrollment and attendance rates, as well as graduation, enrollment in secondary school and matriculation to tertiary institutions. The first experiment compares the ‘basic’ with the ‘savings’ treatment, while the second experiment evaluates the ‘tertiary treatment’.
 
On average, all of the designs significantly increase attendance, generating gains of 3 to 5 percentage points. Despite the reduced bi-monthly transfers, the savings and tertiary treatments increase attendance rates by at least as much as the basic treatment. However, these two non-standard treatments are superior to a basic cash transfer when considering enrollment rates at both the secondary and tertiary levels. Within secondary school, simply postponing part of the transfer increases re-enrollment by 4 percentage points compared with no significant change for students in the basic treatment. The tertiary treatment increases secondary enrollment by 3.7 percentage points. The savings and tertiary treatments also appear to succeed in increasing the matriculation to tertiary institutions. The savings treatment increases enrollment by 9.4 percentage points while the tertiary treatment proves particularly effective, increasing matriculation by 48.9 percentage points.
 
Moreover, this study identifies the specific groups for which the different interventions have greatest effects. The difference, for example, in performance of the basic and savings treatments is entirely driven by their effects on the most at-risk students. The savings treatment is especially effective at improving enrollment of the lowest income students and students with the lowest participation rates. In comparison, the basic treatment has little effect on these groups of students. The tertiary treatment performs similarly to the savings treatment with a much more significant impact on students unlikely to re-enroll. This suggests that modifications in the structure of these interventions can also help target the program by better meeting the needs of those students most likely to drop out of school.  
There is some evidence that participation in these programs may cause potentially worrisome reallocation of resources within the household. For example, such spillover effects are evident in the finding that siblings (particularly sisters) of treated students work more and attend school less than those in families that received no treatment. Such findings suggest that families may decide to concentrate resources towards the sons and daughters that have become program beneficiaries, and away from those children that did not.
 
Overall, this research shows that experimenting with the design of incentive programs may have substantial benefits in terms of the efficacy of these programs. Simply postponing some of the cash transfers to a large lump-sum paid at the time of re-enrollment increases enrollment in both secondary and tertiary institutions without reducing daily attendance – particularly so for the poorest students and those most at-risk of dropping out. Moreover, incentivizing on graduation rather than on attendance alone has proven to be particularly effective, leading to higher levels of daily attendance and higher levels of enrollment at secondary and tertiary levels.
 
Related Papers Citations: 
Barrera-Osorio, Felipe, Marianne Bertrand, Leigh Linden, and Francisco Perez-Calle. 2011. "Improving the Design of Conditional Transfer Programs: Evidence from a Randomized Education Experiment in Colombia." American Economic Journal: Applied Economics. 3(April): 167-95.

 

Marianne Bertrand

Financial Inclusion for the Rural Poor Using Agent Networks

Many people in developing countries rely on risky and expensive methods of managing their assets. In this study, researchers are evaluating whether lowering the cost of accessing savings accounts through local point-of-sale enabled agents and providing financial literacy training impacts the saving and consumption patterns of cash transfer beneficiaries in rural Peru.

Policy Issues:
In developing countries, poor households often do not have access to formal financial products or utilize bank accounts to save for the future. Without a safe and secure way to save, many people rely on riskier and more expensive methods of managing their assets. Increasingly, government-to-person cash transfer programs are addressing this issue by providing beneficiaries with formal savings accounts through which they disburse the cash transfers. In Peru, evidence from one such program suggests that very few beneficiaries use their accounts to save, preferring instead to withdraw the entire cash transfer immediately after it is made. Beneficiaries may prefer to withdraw their funds all at once due to the time and cost required to travel to a bank branch or ATM to access their account, especially in rural areas where there is limited banking infrastructure.
 
Would reducing the cost of accessing formal bank accounts lead beneficiaries to use their accounts to save more of their cash transfers or change their spending patterns? This evaluation explores how the introduction of branchless banking affects the costs of accessing cash transfers and how beneficiaries respond to reduced transaction costs. 
 
Context:
The Peruvian Ministry of Development and Social Inclusion operates a conditional cash transfer program called JUNTOS. The program provides a bi-monthly transfer of 200 Peruvian soles, approximately US$70, to 660,000 impoverished female heads of households who are either pregnant or have children under 19 years of age. The transfers are conditional on households providing access to education, nutrition, and health services for their children. The state bank, Banco de la Nación, opens a savings account for all JUNTOS beneficiaries. While 67 percent of users collect payments through these accounts (as opposed to delivery via armored transport), only 18 percent of users have a bank branch in their district. As a result, most users must collect their payments from a branch in a neighboring district. Preliminary analysis of government data suggests that users  commute on average over five hours and spend 10 percent of their payment on transportation to receive their transfer. Facing such steep costs, most users limit the number of trips they make to a bank branch and withdraw their payments all at once when they do make the trip. Transportation costs are often raised on payment days and markets with an abundance of temptation goods are typically organized around bank branches, leading to a large amount of the transfer to be spent on the day of payment. This pattern of infrequent and relatively large withdrawals may make it difficult for many beneficiaries to use their JUNTOS accounts to save, even if they wish to do so. In an initial survey, 31 percent of JUNTOS beneficiaries report having some type of monetary savings, but only 1 percent of beneficiaries do so through their JUNTOS account. 
 
Description of Intervention:
Researchers are conducting a randomized evaluation to explore the impact of allowing JUNTOS beneficiaries to collect their payments though branchless banking agents. In the branchless banking system, local bank agents, typically shopkeepers, serve as deposit and withdrawal points for account holders to access their funds with debit cards. The agent based network will allow the national bank to increase the number of withdrawal points for JUNTOS users, reducing transportation costs and potentially giving users a greater degree of access to their accounts. If this is the case, users may begin to use their account to save more of their JUNTOS payments, making smaller and more frequent withdrawals. 
 
In order to evaluate the effect of branchless banking, a sample of 60 sub-regional districts, each with approximately 300 JUNTOS beneficiaries, will be randomly assigned to one of three groups. In the first group, branchless banking agents will be established in each district, allowing beneficiaries to access and withdraw funds from their JUNTOS accounts. In the second group, branchless banking agents will be introduced and users will also receive basic financial literacy education and training on accessing their accounts through branchless banking agents. The third group will serve as a comparison group, where branchless banking agents will be introduced only after the twelve-month evaluation period. One year after banking agents are introduced, the researchers will collect information on savings and consumption behavior from household surveys. The study will also incorporate administrative account usage data from Banco de la Nación and the JUNTOS program to examine how beneficiaries use their accounts when they can access them through branchless banking agents.
 
Results:
Results forthcoming.

Roots and Remedies: Persistent poverty and violence amongst urban street youth in Liberia

Policy Issue:

Poor and underemployed youth can be found at the hearts of riots, revolutions, civil wars, and petty and organized crime. In post-conflict countries, where state capacity is weak, frustrations are many, and jobs are few, policymakers are particularly concerned about these youth’s potential to destabilize society. Liberia, which recently suffered through 14 years of civil conflict, has named “youth disempowerment” as one of two major threats to durable and lasting peace. Liberia’s 2009 Youth Fragility Assessment sums it up this way: “the youth… simply wish for… the prospect of some day earning an income, even a modest one. For many, this is the impossible dream... the challenge is to make it possible, soon and for everyone.” The stakes are extremely high. The World Bank writes: “while much of the world has made rapid progress in reducing poverty in the past 60 years, areas characterized by repeated cycles of political and criminal violence are being left far behind….," and calculates a civil conflict costs the average developing country roughly 30 years of GDP growth. A quarter of the world’s population (1.5 billion people) live in places plagued by recurring and endemic violence.

How can governments and NGOs raise employment and reduce the risk of violence among these poor and risky populations? Aid programs increasingly focus on helping youth through markets, especially through microenterprise development. The logic of this assistance, however, rests on the existence of market failures among the poorest of the poor: imperfect credit markets, or production discontinuities such as minimum start-up costs or low returns to small investments. Cash grants or credit are needed to achieve minimum scale. Street youth with no assets and weak social networks may be particularly vulnerable to this trap. But so far there has been little research proving the existence of market failures or the ability of aid to help.

Meanwhile, both psychologists and economists have begun to explore the extent to which behavioral skills – such as impulse control, time preferences for immediate vs. delayed gratification, risk aversion, conscientiousness, setting and keeping long range goals, and being deliberate in choices – contribute to poverty. In a war zone, being highly present-focused might indeed be the optimal survival strategy. During peacetime, however, the absence of such preferences could in theory constitute a second source of persistent poverty: a behavioral poverty trap, leading to low savings rates, wastage of any windfalls, and high-risk behavior including involvement in drugs, crimes, and violence. Importantly, core principles underlying much economic and psychological theory assume that such preferences are fixed in young adulthood, leading anti-poverty projects to take a paternalistic approach. Again, little research has critically examined these assumptions.

Counter to conventional wisdom, preliminary investigation suggests that a behavioral transformation program, akin to cognitive behavioral therapy, can be successful. This finding, if true, would be groundbreaking, challenging conventional economic and psychological models of behavior, which posit that preferences and behaviors are stable and difficult to change, especially among adults.

Context of the Evaluation:

The study is designed to disentangle how cash and capital constraints versus dysfunctional preferences and behaviors contribute to the poverty and violence of the young men and women living on Monrovia’s streets, and to create an inexpensive and scalable program that will reduce poverty, violence, and social instability among unstable youth in Liberia and beyond.

On the preferences and behaviors side, the questions are (a) What role do cognitive and behavioral traits play in persistent poverty and violence?; (b) Are these cognitive and behavioral traits malleable in adulthood, and is sustained cognitive behavior change possible?; and (c) Will changing them reduce poverty and violence? On the market failures side, the questions are (a) What role does the lack capital and credit play in persistent poverty and violence?; (b) Will unconditional cash transfers relieve this constraint and reduce poverty and violence?; and (c) Do capital constraints and cognitive and behavioral deficiencies interact, and must both constraints be relieved to reduce poverty and violence in sustained way?

Description of the Intervention:

This “Sustainable Transformation for Youth in Liberia” (STYL) program is an experimental program, being jointly run by the research team and two NGO partners: CHF International and NEPI. As of mid-2012, STYL will have enrolled approximately 1,000 youth. Youth are recruited from urban areas where large numbers of underemployed youth congregate, and are targeted for the program on the basis of exhibiting the following characteristics: persistently poor; homeless; lack of self-discipline; angry, hostile, depressed; idle and not busy with productive pursuits; involved in organized or petty crime, and/or conflict with the law; and getting drunk and/or high regularly.

The STYL study is currently experimentally evaluating two interventions, each on its own as well as in concert with the other.

A behavioral Transformation Program (TP), akin to cognitive behavioral therapy (similar to Alcoholics Anonymous) and life-skills programs. The TP has the aims of bolstering the cognitive and social skills necessary for entrepreneurial self-help, raising youth’s aspirations, and equipping the youth to reach them. The TP involves half-day sessions 3-times a week, for 8 weeks, held in groups of 20 led by 2 counselors. The curriculum includes modules on anger management, impulse control, future orientation and planning skills, and self-esteem.

An unconditional cash grant program, in which youth are given a large $200 one-time cash grant disbursement. How the grant is spent is entirely up to the recipient, though a grant orientation session provides some basic training on financial management and business planning.

Individual youth are randomly assigned to either receive the TP; the cash grant; the TP and then the cash grant; or neither.

The plan is to conduct both short-term and long-term endline surveys to capture treatment effects, through surveys and behavioral games. If the basic interventions are shown to be effective, the research team hopes to further improve program design through iterative tweaking and testing, including varying cash grant size and TP length and intensity, and trying additional potentially complementary interventions, in order to help policymakers achieve goals most cost-effectively.

Results and Policy Lessons:

Forthcominng

 

Media coverage of this project:

Chris Blattman Talks with NPR's Planet Money team here.

Chris Blattman and Paul Niehaus in Foreign Affairs here.

Jason Margolis interviews ex-combatants and researchers Tricia Gonwa and Chris Blattman.

Ex-combatant Reintegration in Liberia

For post-conflict societies, the challenges of reintegrating ex-combatants and war-affected youth are likely to far outlast and outsize the formal demobilization, disarmament and reintegration (DDR) of ex-combatants. These programs, conducted in war’s immediate aftermath, form an important part of a policymaker’s post-conflict toolkit. While ex-combatants receive special policy attention, poor and underemployed men are also widely considered a threat to political stability.

Find a more in-depth policy report here. 

Context of the Evaluation:

In Liberia, where the bulk of the population is young, poor, and underemployed, many rural youth continue to make their living through unlawful activities, including unlicensed mining, rubber tapping, or logging. Many of them are ex-combatants, and some remain in loose armed group structures, doing the bidding of their wartime commanders. While the security situation has steadily improved since 2003, the government, the UN, and NGOs fear that these youth are a possible source of instability, particularly in hotspot regions where mining, rubber tapping, or logging and the allure of “fast money” attract young men from around the country. These youth may also be recruited into regional conflicts as mercenaries. Agriculture is and will continue to be a major source of employment and income for rural Liberians. The international NGO Landmine Action (LMA, now known as Action on Armed Violence) runs an innovative and intensive agricultural training program, targeting ex-combatants and other high-risk youth in rural hotspots.

Description of the Intervention:

The LMA program is broader and more intensive than most ex-combatant reintegration programs, and is designed to rectify some of the main failings of prior demobilization programs: it is oriented towards agriculture (the largest source of employment in Liberia); it provides both human and physical capital; and it integrates economic with psychosocial assistance. It also targets youth at natural resource hotspots that presented the most immediate security concerns.

LMA took youth selected for the program to residential agricultural training campuses, where they received 3-4 months of coursework and practical training in agriculture, basic literacy and numeracy training, psychosocial counseling; along with meals, clothing, basic medical care, and personal items. After the training, counselors facilitated graduates' re-entry with access to land in any community of their choice.  Graduates received a package of agricultural tools and supplies, valued at approximately US$200. The program's total cost is approximately $1,250 per youth, excluding the cost of constructing the campuses. The program was designed to give youth a sustainable and legal alternative to illegal resource extraction, ease their reintegration into society, reduce the risk of re-recruitment into crime and insurrection in the future, and to improve security in hotspot communities.

LMA recruited twice as many youth as it had space for in its programs, and researchers randomly assigned half of the youth to treatment (receiving the program), and half to a comparison group (not receiving the program). By comparing these two groups 18 months after the program, researchers can see the effect of the intervention on agricultural livelihoods, shifts from illicit to legal employment, poverty, social integration, aggression, and potential for future instability.  Despite massive migration, 93% of the youth were found at the time of the endline survey. The qualitative study included observation and a series of interviews with 50 of the youth.

Results and Policy Lessons:

Engagement in agriculture: More than a year after completion of the program, program participants are at least a quarter more likely than the control group to be engaged in agriculture, and 37% more likely to have sold crops. Interest in and positive attitudes toward farming are also significantly higher among program participants. 

Illicit activities:The program had little impact on rates of participation in illicit activities like mining, but those who participated in the program do spend fewer hours engaged in illicit activities, as agricultural hours seem to substitute somewhat for hours spent in illicit activities.

Income, expenditures, and wealth:  There was a sizable increase in average wealth from the program, especially in household durable assets, but no change in current income (last week and last month), savings or spending for the average program participant. Overall, the evidence suggests that cash cropping provides periodic windfalls from sales, and that these are mainly invested in durable assets (and not necessarily in agricultural inputs or equipment).  Qualitative observations also suggest that access to markets may have been an important constraint on success.

Social engagement, citizenship, and stability:  There were small but positive improvements across most measures of social engagement, citizenship, and stability. While not all of the estimated impacts are large enough to be statistically significant, they nevertheless suggest a small but broad-based reduction in alienation and some gains in stability. The evidence on aggression and crime, however, does not point to a significant reduction in illegal or aggressive behaviors among program participants.

Interest and mobilization into the election violence in Cote d’Ivoire:Conflict broke out in Cote d’Ivoire shortly before the launch of the program evaluation.  Self reported rates of interest in the violence and mobilization were fairly low among the sample population, but they were especially low among program participants – they tended to report a third less interest in or links to recruiters and recruitment activities. Given the difficulty of shifting such behaviors, these impacts of the program are regarded as extremely promising.

For a policy memo with detailed results, as well as recommendations for reintegration, livelihoods, and poverty alleviation programs in Liberia, please see here.

Temporary Labor Migration as Mitigation: Strategies for Managing Seasonal Famine

Rural to urban migration is a common feature of many developing economies, as people travel to larger cities in search of better employment opportunities. In places where farmers must rely on seasonal crops for their livelihood, seasonal migration away from rural areas can help households increase their income and mitigate the risk inherent in an otherwise agriculture-dependent economy.

 
Policy Issue: 
Rural to urban migration is a common feature of many developing economies, as people travel to larger cities in search of better employment opportunities. In places where farmers must rely on seasonal crops for their livelihood, seasonal migration away from rural areas can help households increase their income and mitigate the risk inherent in an otherwise agriculture-dependent economy. That some people choose to stay behind and risk famine indicates that there may be barriers to migration, such as credit constraints, lack of information about urban job opportunities, or a desire to remain with local family. Providing incentives for seasonal migration may help identify and overcome these barriers, and mitigate the negative effects that weather patterns can have on rural farmers. Additionally, incentivizing migration to urban labor markets may be a more cost-effective method of overcoming famine than simply providing food aid to the affected areas.
 
Context of the Evaluation: 
According to the 2005 Bangladesh Household Income and Expenditures Survey, 57 percent of households in the greater Rangpur districts in the Northwest were living below the poverty line compared to 40 percent in Bangladesh as a whole. In this region 43 percent of households experience extreme poverty, defined as individuals who cannot meet the 2100 calorie per day food intake even if they spend their entire incomes on food purchases only. These districts experience seasonal food insecurity, which can often result in famine, known locally as Monga. In Rangpur, Monga is connected to the cultivation of rice, which requires large labor input at planting and harvesting, but almost no work in between. Marginal farmers and agricultural laborers who do not have saved income and cannot find other work experience Monga.
 
It is common for agricultural laborers in other regions of Bangladesh to either switch to local non-farm labor markets or to migrate to urban informal labor markets in search of higher wages in response to price hikes and wage drops during the pre-harvest season. If he finds work, the laborer can send money back to his family to help alleviate the effects of the pre-harvest lean season. However, this is generally not seen in Rangpur District. A national survey found that 22 percent of all Bangladeshi households receive domestic remittances, while only 5 percent of households in Rangpur reported receiving domestic remittances. This intervention primarily seeks to understand why these Monga-affected workers appear hesitant to seasonally migrate to better employment opportunities.
 
Details of the Intervention: 
There were two principal interventions: providing information about job opportunities in other locations and providing monetary incentives to migrate.
 
A subset of households were given information about types of jobs available in other locations, the likelihood of getting each job, and approximate wages for four pre-selected potential migration destinations. A subset of households were offered Tk 800 ($11.50) to migrate either in the form of cash or credit. Tk 600 ($8.50) was given pre-migration and Tk 200 was given once the migrant reported to the research office at his or her destination. A random subset of those receiving a monetary incentive were required to migrate in groups of either 2 or 3 as a condition of receiving money, and a fraction of those groups were chosen by the researchers, while for the rest the households had some choice regarding whom to migrate with. Destinations were also specified for a random subset of the households receiving an incentive, while the rest could choose from a limited set of cities where the researchers had offices and enumerators stationed (to help track the migration experience) and still take advantage of the subsidy.
 
In total there were 21 treatment groups with different combinations of information, incentives, migration group size, and choice of migration partners or destinations.
 
Results: 
Incentives: The researchers found that offering an incentive to migrate had a large effect on likelihood of seasonal migration.  Over 40% of households that received a cash or credit incentive migrated, compared to only 14% of households not receiving an incentive.  Providing information about job opportunities but no incentives only increased the likelihood that someone from a household migrated by 3 percentage points. These results suggest that credit or saving constraints reduce migration.
 
Group Size: Requiring migrants to form groups of three instead of pairs reduced migration probability by almost 6 percentage points. Migrating in larger groups changes the dynamic for the individuals involved with respect to using social networks to find a job and sharing the risks of migration with their partners. When partners are assigned, the larger group reduces propensity to migrate by only 3 percentage points whereas in self-chosen groups, having to form larger group reduces propensity to migrate by almost 9 percentage points. This suggests that people may have trouble forming groups and finding the right set of partners with whom to migrate.

Migration Location: Placing restrictions on a migrant's destination decreased take-up of the migration incentive by 7.4 percentage points. The distance to the destination also appears to be an important consideration. For example, when faced with the option of migrating to two similar sized cities with comparable market opportunities, households were 12 percentage points were likely to migrate to the closer city. However, the size of the labor market is even more important: migrants are 6 percentage points more likely to take-up the offer when Dhaka is specified as the destination compared to when a nearby smaller town, Munshiganj, is offered.
 
Further analysis will provide more evidence on the key determinants of the migration decision as well as the longer-term effects of seasonal migration.

Moving Beyond Conditional Cash Transfers in the Dominican Republic

Conditional cash transfers have proven effective as incentives for the extreme poor to visit a health clinic or send their children to school. But are such programs sustainable? If the cash assistance is taken away, will families find themselves back where they started before the program? In this study, researchers evaluate if financial education and business training can help recipients graduate from a conditional cash transfer program, and what type of training is most beneficial.

Policy Issue:
Cash transfer programs are increasingly common across developing countries. These programs provide income support to those living in extreme poverty, and in the case of conditional cash transfer (CCT) programs, provide incentives for parents to invest in the human capital of their children by making the transfers conditional on certain behaviors, like attending school or visiting a health clinic. Despite their established benefits in terms of improving health and educational achievement, many policymakers and development practitioners remain concerned about the extent to which households may become dependent on cash transfers to maintain their living standards. Even with greater access to healthcare and education, it can be difficult for beneficiary households to manage their personal finances, find and maintain a stable job, or start a new business. It is not clear whether families will revert to pre-program poverty levels when the transfers are no longer provided, or whether the transfers enable more permanent changes in household and business finances, ultimately allowing beneficiaries to graduate from the program.
 
Context of the Evaluation:
Solidaridad is a CCT program in the Dominican Republic that provides cash transfers to poor households if they invest more in education, health, and nutrition. Eligible families receive around US$75 every three months if they comply with certain conditions, including the school enrollment and attendance of all household children, and regular health check-ups for children under the age of five years old. Approximately 20 percent of the Dominican population lives in moderate or extreme poverty, and are eligible to receive trimonthly transfers from the program.[1] The beneficiaries receive these transfers via a debit card to be used to purchase basic food products at authorized stores, and meet every three months in community groups (núcleos) to receive training in nutrition and preventive health. However, Solidaridad does not currently have a graduation strategy to encourage beneficiaries to improve their household financial management and develop stable income sources from jobs or small business creation.
 
Description of the Intervention:
Researchers are using a randomized evaluation to assess whether providing financial literacy and business training to CCT beneficiaries can help them graduate from the program, and what type of training is most beneficial.
Two hundred and forty núcleos, with a total of 3,600 individuals, will be selected from government administrative data and randomly assigned to either the treatment or comparison group. All members of the treatment group will receive financial literacy training intended to improve household financial management skills. In addition, núcleos in the treatment group will also be randomly selected to receive one or more of the following:
  • Professional vs. peer trainers. Of the 120 núcleos in the treatment group, half will receive financial literacy training from professional trainers, while the other half will receive the training from their peers.
  • Business vs. job skills training.In addition to the financial literacy training, half of the núcleos in this treatment group will receive an additional training session on financial management for businesses, while the other half will receive additional training on job skills (finding, acquiring, and maintaining employment).
  • Budgeting notebooks. Within each núcleo, a random subset of beneficiaries will be selected to receive notebooks that can be used to maintain household and/or business budgets to test whether the notebooks increases the impact of the training.
  • Access to formal financial services. Of the beneficiaries who already own a business and are interested in and eligible to receive a loan, a random subset will be offered a loan and an accompanying savings account from a local commercial bank.
Key outcome measures include knowledge and management of household and business finances, household and business assets, and the employment status and conditions of household members.
 
Results and Policy Lessons:
 
Results forthcoming

[1]Government of the Dominican Republic. “Programa Solidaridad.” http://www.solidaridad.gov.do/

Conditional Cash Transfers and HIV/AIDS Prevention in Malawi

Conditional cash transfers, where money is given to individuals on certain conditions, have been used successfully to incentivize families to send their children to school, to encourage people to get preventive healthcare check-ups, and to change other behaviors. In this study, researchers evaluated if financial incentives could motivate safer sexual behavior. In Malawi, where 11 percent of adults are infected with HIV/AIDS, participants were offered different sums of money to maintain their negative HIV status for one year. The promise of financial incentives of any amount—even four months of wages—had no effect on subsequent sexual behavior, pregnancy or HIV status. However, after receiving the monetary reward, men were significantly more likely to have engaged in unprotected sex. Women were significantly less likely to have had unprotected sex after receiving the money. The results suggest that policymakers should use caution in considering conditional cash transfers as a tool for HIV prevention.

Policy Issue: 
At the end of 2009, more than 33 million people were living with HIV. Given the extent of the HIV/AIDS epidemic, policymakers face an urgent need to develop effective treatment and prevention programs. While most HIV prevention strategies target behavior change, evidence of the impact of these programs remains controversial and no single intervention has emerged as an established approach. Conditional cash transfers (CCTs) have been used successfully in a variety of settings as a means of incentivizing socially desirable behavior change, such as school enrollment or attendance at preventive healthcare check-ups. There is some evidence that CCTs could be used to prevent the spread of HIV by incentivizing individuals to stay free of sexually transmitted diseases, however more evidence is needed to understand responses across various contexts and populations.
 
Context of the Evaluation: 
Eleven percent of adults in Malawi are infected with HIV/AIDS, giving the country the 9th highest prevalence in the world.1 Although the HIV prevalence rate in the sample area was considerably lower than the national rate, at 6.3 percent, it was comparable to, or greater than, the prevalence rate in much of sub-Saharan Africa. For comparison, in 2009, the HIV prevalence rate in Kenya and Sierra Leone was 6.3 percent and 1.6 percent, respectively.
 
Existing research suggests that CCTs may be an effective method to reduce sexual behavior and prevent HIV. In Tanzania, a program that offered cash incentives for remaining free of curable sexual transmitted infection (STIs) led to a significant reduction in STI infections when participants were offered a large transfer (US$20). However, the program had little impact when participants were offered a moderate transfer (US$10). A second study in Malawi offered girls and their parents US$15 each month to attend school, in addition to covering all school fees. After one year, girls offered the unconditional incentives were significantly less likely to be infected with HIV.ii
 
Details of the Intervention: 
Researchers sought to evaluate whether offering individuals financial incentives to maintain their HIV status could be an effective HIV prevention strategy in rural Malawi. Researchers measured the impact of conditional cash transfers (CCTs) on reported sexual activity, condom use, and incidences of HIV infection. The CCT program builds upon a previous evaluation of the Malawi Diffusion and Ideational Change Project (MDICP), where respondents were offered free door-to-door HIV testing and randomly assigned cash incentives to obtain their results from nearby testing centers.
 
Among MDICP participants that agreed to be tested for HIV in 2006, 1,307 were randomly invited to participate in the CCT program. Seventy-six percent of the sample enrolled as individuals, while the remaining enrolled as couples. Participants were offered incentives of random amounts ranging from zero to 2,000 MWK (approximately US$16) for individuals, and from zero to 4,000 MWK (approximately US$32) for couples, all of which were conditional on maintaining their HIV status for approximately one year. The incentives represented a significant amount of money for respondents, with the higher amount equal to approximately three to four months wages. 
 
Throughout the year, program staff visited participants in their homes and asked about their sexual behavior in the last nine days through interview-administered sexual diaries. From these diaries, researchers developed several indicators of risky or safe sexual behavior, including pregnancy, incidents of vaginal sex, number of days having vaginal sex, condom usage, and the presence of condoms at home. Data was collected three times over the period of the study, at roughly three-month intervals. After the last round of surveys, a trained nurse visited each participant to test for HIV, and financial incentives were awarded based on whether they had maintained their HIV status. Approximately one week later, each respondent was surveyed again about his/her sexual behavior in the past week.
 
Individuals who were HIV-positive at the start of the program automatically received the monetary incentive at the end of the study. These individuals were included in the sample to avoid the possibility that being excluded from the study would signal their HIV positive status to outsiders.
 
Results and Policy Lessons: 
The promise of financial incentives of any amount had no effect on subsequent self-reported sexual behavior or HIV status. Self-reports may be biased towards individuals over-reporting safe sexual behavior, particularly for individuals receiving higher incentives. Despite these potential biases, which would lead to an overestimation of program impact, financial incentives appear to have had no effect.
 
Although the conditional offer of money had no impact, receiving cash after the final round of HIV testing was found to have large effects on respondents' self-reported behavior. In the week following the receipt of the cash transfer, men who received the money were 12.3 percentage points more likely to have had vaginal sex and had approximately 0.5 more days of sex. While self-reported condom use among these men increased by 6.9 percentage points, overall, they were 9 percentage points more likely to engage in riskier sex. Women, on the other hand, were 6.7 percentage points less likely to report engagement in risky sex, a result that is driven by abstinence rather than increased condom use.
These results provide evidence that money given in the present may have much stronger effects than rewards in the future. Unlike the CCT program in Tanzania, this study found no effect of financial incentives on risky sexual behavior, suggesting that policymakers should use caution in considering CCTs as a tool for HIV prevention. The fact that a cash grant reduced risky sexual behavior for women provides further evidence that money can be protective for women, but cautions that programs that aim to motivate safe sexual behavior in Africa may be sensitive to the local and/or cultural context, and the degree of agency individuals to determine their own sexual behaviors.
 
i UNAIDS (2010) “UNAIDS Report on the Global AIDS Epidemic.” www.unaids.org/globalreport/Global_report.htm
ii Baird, Sarah, Craig McIntosh, and Berk Ozler. 2011. "Cash or Condition? Evidence from a Cash Transfer Experiment." The Quarterly Journal of Economics 126(4): 1709-1753.
 
Related Papers Citations: 
Kohler, Hans-Peter, and Rebecca Thornton. 2011. "Conditional Cash Transfers and HIV/AIDS Prevention: Unconditionally Promising?" World Bank Economic Review 26(2011): 165-190.
 

 

Rebecca Thornton

Environmental Investments on Private Land: Planting Trees in Chipata

Many climate change programs that target small-scale farmers seek to change farmers’ agricultural practices, whether to sequester additional carbon or to improve climate resiliency. Farmers are often hesitant to adopt new practices as they often entail high upfront costs. Climate change programs therefore generally provide inputs or incentives for adopting and complying with the program’s objectives. Yet it is unclear how much farmers respond to inputs and incentives, and to which they respond more favorably. This study in Zambia assesses the impact of two programs, one that provides incentives to farmers to grow a nitrogen-fixing tree, and another that provides inputs. 

Policy Issue:

Financing for carbon offset investments is growing quickly. The voluntary market for carbon offsets traded over 700 million dollars worth of emissions reductions in 2008, a third of which came from land use projects.[1]  These investments have the potential to benefit smallholder farmers, not only by creating revenue from selling carbon credits, but also by incentivizing more climate-resilient agricultural practices and technologies to increase production. Many climate change programs that target smallholder farmers seek to modify current agricultural practices, whether to sequester additional carbon or to improve climate resiliency. Because these changes often impose costs on the farmer, many programs provide upfront inputs or incentives for adopting and complying with the program’s objectives.

However, in spite of a growing number of NGO- and government-led adaptation and climate resilience projects, farmer adoption remains a challenge and concerns persist due to the high cost of inputs, training and monitoring in comparison to the value of the credits earned from sequestered carbon. A more rigorous understanding of the relationship between input costs, compliance incentives and program outcomes may help improve the success and cost effectiveness of both carbon offsets and climate resiliency programs. To date, none of the numerous programs that offer landholders inputs or performance payments have systematically varied contract design to generate causal evidence on the determinants of program success.   This study proposes address this knowledge gap in the context of a program promoting fertilizer trees in Eastern Zambia.

The project implementation is designed to allow the researchers to investigate (a) the role of option value in shaping farmer decisions, and (b) the effect of cost sharing and performance incentives on selection into the project and on long-run performance under the contract.

Context:

The partner organization, Mitengo Zambia promotes a fertilizer tree (Faidherbia albida), locally known as the masangu tree, both for its carbon sequestration potential and its ability to help farmers adapt to a changing climate.  Faidherbia fixes nitrogen in its leaves, providing benefits to farmers, including better soil fertility, maize yields and resilience to climate change. To grow the tree, seedlings must be purchased and raised, and then planted among low growing crops, weeded and watered. These adoption costs are highest in the first year and tree survival is low.

Mitengo Zambia  has partnered with Dunavant Cotton to investigate the carbon sequestration and soil fertility potential of encouraging agroforestry adoption among Dunavant farmers. Findings from the research phase will be incorporated in program scale-up with Dunavant Zambia Limited, a leading cotton ginning company in Zambia.

Description of the Intervention:

Around 2,000 outgrower farmers associated with Dunavant cotton in Chipata, Eastern Province, Zambia receive training and subsidized inputs (seedlings) for growing Faidherbia on their land. Most Dunavant farmers produce on a small-scale, with a mean landholding size in the study sample of around one hectare, and have access to loans for cotton inputs from Dunavant.  The company organizes the farmers into groups of approximately 15 geographically clustered farmers. Each group has one lead farmer who, under the Dunavant system, is responsible for training his farmer group on cotton production and, under the Mitengo Zambia program, on Faidherbia planting and management.  

Lead farmers organize trainings on Faidherbia for their groups of farmers, which are attended by Mitengo Zambia and IPA staff who assist with administration of the treatments and the baseline survey.

After their training, farmers decide whether to join the program based on two factors:

(1) Variation in input prices – Farmer groups will be randomly assigned to receive one of four input prices that range from fully subsidized (free) to the cost-recovery price for the implementing organization (approximately $2.50 US). A transport allowance (of $2.50), provided to the farmers to remunerate any transportation costs of attending the lead farmer's training, ensures that farmers have enough cash to make a participation decision based on willingness to pay, not on liquidity constraints. Variation in input prices allows researchers to test hypotheses on risk and on cost-sharing. Specifically, how the probability of take-up changes as the input prices increase, controlling for individual characteristics and incentives, will be assessed.

(2) Variation in incentives – Individuals will be randomly assigned to receive different levels of incentive pay, which farmers are informed of either before or after making their take-up decision. The range of incentives is based on project pilots from the previous year, which ranged from $0 - $30 (0 - 150,000 ZMK). The use of scratch-off cards to reveal the incentives ensures that incentives cannot be manipulated and that the variation is perceived as fair by the participants.  Incentives will be paid after one year, conditional on 70% tree survival.  All farmers received 50 seedlings. The variation in incentives will allow researchers to test the causal effect of incentives, by comparing the probability of take-up and the rate of tree survival for farmers at different incentive levels, controlling for individual characteristics.

At the time of training, farmers receive a detailed baseline household questionnaire that includes modules on demographics, socioeconomic status, agriculture and environmental knowledge. The survey is administered to all farmers who attend the training, regardless of their decision to participate. One year after contracts are initiated, all participating farmers will be visited and the number of surviving trees recorded, an incentive payments delivered on the basis of tree survival.

Results:

Summary results forthcoming.

See more information including detailed findings from an in-country event with cross-sector stakeholders from the Zambian government, private sector, international donor and research community, and leading non-governmental organizations here.

 


[1]Conte, M. and M. Kotchen. Explaining the price of voluntary carbon offsets. Working Paper. (2009)

 

 

Unconditional Cash Transfers in Kenya

While cash transfers have long been a subject of interest as a tool to fight poverty, the overall impact of large transfers of cash, given without conditions, to poor households has yet to be measured. This study evaluated a cash transfer program administered by the NGO GiveDirectly, which gave an average of USD 513 to poor families in rural Kenya. The transfers led to significant increases in income, assets, psychological well-being and female empowerment. Variations in the format and size of the transfers led to differences in outcomes.
 
Detailed results can be found in the policy brief, available here and at the researcher's site, here.
 
Policy Issue:
Programs designed to alleviate poverty often focus on delivering goods or services (e.g. productive assets, training, bed nets, etc.) or capital conditional on certain behaviors to poor households. While these types of programs may be effective in achieving specific goals, they do not provide poor households with the choice and flexibility of allocating resources to meet the needs they find most pressing. An alternative approach to delivering support in-kind is to simply give money to poor households. However, this approach is sometimes received with skepticism, as there is no guarantee that money will be spent to achieve the specific impacts that donors desire. This evaluation studied what happened when poor families were given cash without any stipulations.
 
Context of the Evaluation:
This study took place in Kenya, a country at the forefront of the mobile money revolution. Since the launch of M-PESA, a mobile-phone based transfer service, in 2007, Kenya has become the country with most extensive retail payment network[1]. GiveDirectly is a non-profit organization that leverages the low costs of mobile money to deliver cash transfers to poor households, reducing the cost of delivery to only 10 percent of each donated dollar. Beneficiaries receive donated money on SIM cards and can visit a local M-PESA agent to exchange the mobile credit for cash. Residents in the area of Rarieda, where the study took place, generally live on an average of approximately 1 US dollar per day, and 64 percent of those surveyed said they did not have enough food in their house for the next day.
 
Description of the Intervention:
Households were eligible for the unconditional cash transfer program if they had roofs constructed from non-solid materials (mud, grass, etc). Study villages in the Rarieda district of Kenya were randomly assigned to a treatment or pure comparison group. GiveDirectly identified 1,000 eligible households in treatment villages. Within treatment villages, 500 eligible households were then randomly assigned to receive unconditional cash transfers. These households were compared to 500 control households in the same villages, which did not receive transfers. In addition, the 500 control households were compared with 500 households in pure comparison villages to identify any spillover effects of the intervention. Study households in treatment villages received a baseline survey before randomization, while pure control households where surveyed only at endline.
 
Transfers were randomly assigned to go to women or men, and further randomized to be in the form of a single lump sum transfer of 25,200 KSH (about USD 287), or monthly transfers for nine months with the same total value. A third treatment arm was selected to receive a large sum, with 137 households each given an additional KES 70,000 (about 798 USD) in seven monthly installments of KES 10,000 each. 
 
Money was transferred to beneficiaries using Safaricom’s M-PESA mobile payment system—sending money from the GiveDirectly account to the recipients’ SIM cards. Recipients were required to register with M-PESA, and received a text message when the funds were transferred. They could then visit a local M-PESA agent to transfer mobile credit to the agent’s phone in exchange for cash. Most households in the sample were within a 30-45 minute walking distance to an M-PESA agent. Households were given SIM cards to allow them to redeem money, and the opportunity to purchase a mobile phone if they did not have one, with the cost deducted from their transfer. 
 
A follow-up survey one year after the first transfers collected data on income sources, investment, consumption, food security, school enrollment of children, and mental and physical health. These surveys were complemented by the collection of salivary cortisol levels to measure the impact of unconditional cash transfers on stress.
 
Results and Policy Lessons:
Assets and income: Assets and holdings for those who received transfers were 58 percent (USD 279, in purchasing power parity, or PPP) higher, primarily in home improvements (such as metal roofs, which are far less costly to maintain), and livestock holdings. The transfers increased income for recipients by 33 percent (USD 15 PPP), coming from sources such as livestock and non-agricultural businesses. There is little evidence that cash transfers change the primary source of income for recipients, but they do increase expenditures in non-agricultural enterprises by 10 USD PPP per month, with revenues 11 USD PPP higher. 
 
Consumption: Monthly consumption for recipients of the transfers was 23 percent higher (USD 36 PPP), spread across nearly all categories measured: food, medical and educational expenses, home improvements, and social expenses such as weddings and funerals. The exceptions were temptation goods: there was no increased spending on alcohol or tobacco. The largest increase was in food consumption, which was 19 percent (USD 20 PPP) higher.
 
Food security: Food security index scores were .25 standard deviations (SD) lower for transfer recipients. Specifically, they were 30 percent less likely to have gone to bed hungry in the preceding week, 20 percent more likely to have enough food in the house for the next day, and the number of days children went without food was 42 percent lower.
 
Health and education: Spending on health education increased for transfer recipients, but from relatively low levels. There were no observed increases in health or education outcomes.
 
Psychological and neurobiological measures: Overall there was a .20 SD increase in psychological well-being index, stemming from a .18 SD increase in happiness scores, a .15 SD increase in life satisfaction, a .14 SD reduction in stress, and a .99 SD reduction on a depression questionnaire. Levels of cortisol, a stress hormone as measured in saliva samples did not differ across the groups overall, but large transfers and transfers to women lowered levels for both men and women significantly. 
 
Female empowerment: Positive spillover effects for female empowerment were observed, with an increase of .23 SD on an index of several measures not only for the treatment households, but for all households in the village, suggesting that the transfers can improve the standing of women in general.
 
Types of transfers: With the exception of well-being outcomes mentioned above, there were no differences observed comparing transfers made to women versus men in the household. Monthly transfers were associated with a .26 SD increase in food security relative to lump sum payments, while lump sum payments were associated with higher asset values. Large transfers led to approximately twice the value of assets as small transfers, as well as higher scores on psychological well-being and female empowerment measures.
 
More information can be found in the full policy brief, available here and at the researcher's site, here.
 
 

[1] Klein, Michael, and Colin Mayer. May 2011. “Mobile Banking and Financial Inclusion: The regulatory lessonsWorld Bank Policy Research Working Paper 5664.

Ultra Poor Graduation Pilot in Pakistan

Can an intensive package of support lift the ultra poor out of extreme poverty to a more stable state? This 24-month program provides beneficiaries with a holistic set of services including: livelihood trainings, productive asset transfers, consumption support, savings plans, and healthcare. By investing in this multifaceted approach, the program strives to eliminate the need for long-term safety net services. Spanning seven countries on three continents, the Ultra Poor Graduation program is being piloted around the globe. IPA is conducting randomized evaluations in IndiaPakistanHondurasPeruEthiopiaYemen, and Ghana to understand the impact of this innovative model.

Policy Issue: 

Governments have often attempted to address the needs of the ultra poor by offering consumption support that is costly and offers no clear pathway out of food insecurity. The Ultra Poor Graduation Pilots attempt to apply a model, developed by BRAC in Bangladesh, which recognizes that the ultra poor need the "breathing space" that is provided by temporary consumption support, but that public funds may be better used to build households’ capacities to maintain a sustainable livelihood. The idea is that this initial assistance, lasting two years, will place households securely on the first rung of the development ladder, which they can then climb with the help of appropriate development strategies. The model incorporates a comprehensive package of services: a productive asset (such as chickens or goats), consumption support, livelihood trainings, healthcare, and financial services.Ideally this wide set of support services will help households to weather any shocks they may face along during their climb out of ultra poverty.

This project is a part of a set of evaluations, in partnership with CGAP and the Ford Foundation, that intends to determine whether the model, pioneered in Bangladesh, is effective in a range of contexts.

Context of the Evaluation:

Poverty in Pakistan is a growing concern—almost one third of the county’s 170 million inhabitants live in poverty, an increase of almost 13% since the1990s,[i] and there are currently 3.2 million people displaced by wars[ii]. Pakistan is home to a large feudal landholding system, where numerous poor tenants are indebted to landowners. Lacking access to formal credit, poor tenants are bonded to their impoverished condition and are often exploited for their labor.

This study takes place in the Coastal Sindh region of Pakistan. Four NGOs, Aga Khan Planning and Building Services Pakistan (AKPBSP), Badin Rural Development Society (BRDS), Indus Earth Trust (IET), Sindh Agricultural and Forestry Workers Coordinating Organization (SAFWCO), have partnered with IPA and the Pakistan Poverty Alleviation Fund to implement the Ultra Poor Graduation Pilot to assist these vulnerable households.

Details of the Intervention:

Eligible households are identified using a Participatory Wealth Ranking (PWR), a method that engages villagers in creating an economic ranking of all households in a community.  After the economic status of eligible families is verified, households are randomly assigned to either a treatment or comparison group. The treatment beneficiaries receive a monthly stipend of Rs. 1000 ($12 US) for the first year to stabilize consumption.  Next, households choose an asset and begin livelihood training.  Examples of livelihood activities include embroidery, raising livestock, fishing, and carpentry.  Beneficiaries are encouraged to save money at home, in savings boxes, or with Rotating Savings and Credit Associations (ROSCAs) that pool money and periodically distribute group savings to each member.  Lady Health Visitors working with some of the partners provide health services to participating households. 

Results:

Forthcoming.

For additional information on Ultra Poor Graduation Pilots, click here.

 

[i] AusAID, Australian Government, “Pakistan

[ii] Hani, Faez and Seri Begawan, Bandar, “3.2m Pakistanis displaced by war against Taliban need urgent aid,” The Brunei Times

HIV Prevention Among Youths: Evidence from a Randomized Controlled Trial in Kenya

Policy Issue: 

The vast majority of new HIV infections occur in sub-Saharan Africa, where nearly 2 million people become infected with HIV/AIDS every year. Forty-five percent of these new HIV infections occur among people under 25 years old, and nearly all of them are due to unprotected sex. Ensuring the adoption of safer sexual behavior among youth is critical to keeping the new generations free of HIV.

The objective of this project is to examine, through a large randomized controlled trial, the impact of two HIV prevention strategies among a youth population in Kenya. The two strategies to be tested are: Voluntary Counseling and Testing for HIV (VCT), and condom distribution.

  • VCT is a critical entry point for access to HIV/AIDS treatment and care, and is being scaled up in many countries. But VCT could also be a powerful prevention tool. By providing personalized counseling as well as information about high-risk behaviors, VCT could motivate people to adopt safer sexual behavior and prevent transmission of HIV. This could be particularly important for adolescents and young adults, who typically have had their sexual debut but might not have perfect information about HIV risk. They are often still HIV-negative, and might be better able to change their sexual behavior.

  • Despite strong evidence of the biological effectiveness of the male condom as an HIV prevention strategy, condom use continues to remain low in many countries. Several factors, such as low availability, cost, lack of education about condoms and how to use them, and relationship factors contribute to low usage.  This study examines whether free and easy access to a large quantity of condoms can result in a reduction of risky behaviors and a decline in transmission of STIs among youth.

Context of the Evaluation: 

Kenya has the 10th largest HIV infected population in the world – nearly 7% of Kenyans are infected.1 The study is being implemented in four districts of Kenya’s Western Province (Butere, Mumias and Bungoma South and Bungoma East), spanning an area of approximately 50,000 square kilometers. Since about 45% of all new infections worldwide occur in youth aged 15-24 years, this study focuses on young people (both men and women). The sample is composed of approximately 10,000 youths (half of them female) who were 17 to 22 years old in 2009.

Despite the expanding implementation of VCT, an estimated 80% of Kenyans living with HIV are unaware of their status. Take-up of VCT in traditional settings (such as government health centers) is low. As such, several alternative models of VCT service provision, including mobile VCT, workplace VCT and home-based VCT are being explored. This study has used both mobile VCT and VCT within homes, and has achieved a very high take-up (85% of the people who were offered VCT accepted it).

Condom usage in Kenya is also relatively low. Only 24% of women aged 15-49 who reported multiple partners in the last 12 months used a condom during their last sexual encounter. Despite significant efforts to increase availability of free male condoms, recent data suggest that condom distribution remains low, with on average 0.71 condoms distributed per eligible person per year.

Details of the Intervention: 

A detailed baseline survey was administered to 10,420 youths (about ½ of them girls) between March 2009 and July 2010. All respondents were tested for Herpes (HSV-2) and for HIV (via anonymous linked testing) during the baseline. The prevalence rates for HSV-2 and HIV were 8.5% and 0.5%, respectively.

Among those surveyed at baseline, 25%  had been randomly pre-selected to be offered VCT, 25% had been randomly pre-selected to receive free condoms, and 25% had been randomly pre-selected to receive both VCT and free condoms.

Those pre-selected for VCT were offered VCT right after the baseline survey had been administered. Eighty-seven percent of them consented.  The consent rate was slightly higher among girls than among boys.

Those pre-selected for free condoms were offered three boxes of 50 condoms each, right after VCT (if also sampled for VCT) or right after the baseline survey had been administered. Not all respondents offered condoms took them. Seventy-one percent took all 150 condoms, 19% took only some of them, and the remainder, 10%, refused to take any condoms. The acceptance rate was much higher among boys. While 87% of boys took all the condoms and only 5% took none, only 52% of girls took all 150 condoms and 15% took none.

A follow-up survey will be conducted in 2011-2012. The survey will include detailed questions on sexual behavior, including sexual debut, number and type of partners, and condom use, as well as detailed questions on beliefs regarding HIV transmission, own HIV status, and own exposure to risk. Crucially, the follow-up survey will also include HSV2 and HIV testing.

Results: 

Results forthcoming.

1 CIA World Factbook, “Kenya”. Available at https://www.cia.gov/library/publications/the-world-factbook/geos/ke.html

Ultra Poor Graduation Pilot in Ethiopia

Can an intensive package of support lift the ultra poor out of extreme poverty to a more stable state? This 24-month program provides beneficiaries with a holistic set of services including: livelihood trainings, productive asset transfers, consumption support, savings plans, and healthcare. By investing in this multifaceted approach, the program strives to eliminate the need for long-term safety net services. Spanning seven countries on three continents, the Ultra Poor Graduation program is being piloted around the globe. IPA is conducting randomized evaluations in IndiaPakistanHondurasPeruEthiopiaYemen, and Ghana to understand the impact of this innovative model.

Policy Issue:

Governments have often attempted to address the needs of the ultra poor by offering consumption support that is costly and offers no clear pathway out of food insecurity. The Ultra Poor Graduation Pilots attempt to apply a model, developed by BRAC in Bangladesh, which recognizes that the ultra poor need the "breathing space" that is provided by temporary consumption support, but that public funds may be better used to build households’ capacities to maintain a sustainable livelihood. The idea is that this initial assistance, lasting two years, will place households securely on the first rung of the development ladder, which they can then climb with the help of appropriate development strategies. The model incorporates a comprehensive package of services: a productive asset (such as chickens or goats), consumption support, livelihood trainings, healthcare, and financial services. Ideally this wide set of support services will help households to weather any shocks they may face along during their climb out of ultra poverty.

This project is a part of a set of evaluations, in partnership with CGAP and the Ford Foundation, that intends to determine whether the model, pioneered in Bangladesh, is effective in a range of contexts.  

Context of the Evaluation: 

This study takes place in the Wukro district of the Tigray region of northern Ethiopia. The World Bank reports that 77% of the population lives on less than US$2 per dayand 39% of Ethiopians live at $1.25 per day[1]. Eighty-five percent of Ethiopian households are engaged in agriculture[2].  Droughts are common in Ethiopia and Tigray was the epicenter of the 1984-85 Ethiopian famine.  The famine, which attracted worldwide media coverage, resulted in relief aid for the region from Live Aid and other efforts. 

More recently, aid efforts have begun to shift from direct food support and food-for work programs to interventions designed to increase long-term prosperity.  These interventions include credit for entrepreneurship, savings associations, and agricultural support, such as irrigation, water storage, and market linkages.  The Ultra Poor Graduation Pilot targets the lower tier of those households who are already a part of the Productive Safety Net Programme (PSNP),the Government of Ethiopia’s program to address food security issues by offering guaranteed employment for up to fifteen days a month in return for cash or food handouts designed to meet households’ basic nutritional needs. 

Description of Intervention:

Five hundred treatment households in ten villages in Wukro district initially receive consumption support transferred through PSNP for six months.Once households’ food consumption stabilizes, they receive individual savings accounts at DECSI, a microfinance institution operating in the region, as well as business training. Later on, participants receive a livelihood asset chosen from a preselected list of options: raising small ruminants, cattle fattening, petty trade or beekeeping, to help jump start a new economic activity. Participants are monitored throughout the process – they receive home visits to help boost confidence and build expertise, and are provided with access to social and health services.

Results:

Results forthcoming.

For additional information on the Ultra Poor Graduation Pilots, click here.

 


[1] The World Bank, “Data: Ethiopia” 

[2] CIA, “World Factbook: Ethiopia Economy” 

Northern Uganda Social Action Fund – Youth Opportunities Program

Youth unemployment is a persistent problem in the developing world, particularly in post-conflict settings, posing both economic and security issues. In growing, stable economies such as Uganda, what holds back youth from reaching their potential?  One theory suggests that youth unemployment is due primarily to the lack of sufficient capital to support entrepreneurship. If this is true, cash transfers or cheap credit could lead to a burst of self-employment. Evidence from other areas, such as studies on microcredit, suggests that alleviating these constraints with loans has little effect on earnings. In Northern Uganda, which is returning to peace after twenty years of war, the government’s Youth Opportunities Program offered cash transfers to groups of youth to increase employment and reduce conflict. Follow-up surveys two and four years later found a shift from agricultural work towards skilled trades and strong increases in income. Women in particular benefited from the cash transfers, with incomes of those in the program 84% higher than women who were not. There were no differences, however, in social outcomes such as community participation, aggression, and social cohesion.

See the full paper herea policy note for the World Bank here, and Chris Blattman’s blog discussion here.

Policy Question:
In developing countries, high unemployment - particularly among youth - is a pressing concern. Jobs, particularly higher-skilled labor and productive small enterprise, provide incomes and reduce poverty. For governments, transitioning from an economy based on small-scale agriculture to one based on entrepreneurship and production is critical for long-term growth. Employment is also seen as important for building social stability and political engagement in communities uprooted by long-term conflict.
 
One form of intervention offers cash in the hopes that youth will invest it in the training and assets to learn a trade or form a business. In the development community, anxiety persists over whether this is an effective approach: will youth with little or no financial or business training be able to direct the money towards successful long-term entrepreneurship?  Previous research also raises questions about the ability of women in particular to invest aid into increasing lifetime earnings, given occupational constraints and pressure to share windfalls.1
 
Uganda’s largest employment program sought to test if an intervention as simple as giving cash could help accomplish the country’s long-term economic and social goals for its youth.
 
Context of the Evaluation:
Twenty years of insurgency, instability and conflict led to high rates of poverty and unemployment in northern Uganda, but by 2005 a measure of peace and stability had returned to the region. The centerpiece of the post-conflict recovery plan was a decentralized development program, the Northern Uganda Social Action Fund (NUSAF). In 2006, to stimulate employment growth through self-employment, the government launched a new NUSAF component: the Youth Opportunities Program (YOP), which provided cash transfers to groups of young adults with the goal of encouraging trade-based self-employment. 
 
Description of the Intervention:
The YOP intervention had two official aims: to raise youth incomes and employment and to improve community reconciliation and reduce conflict. The program, targeted at youth from ages 16 to 35, required young adults from the same town or village to organize into groups and submit a proposal for a cash transfer to pay for: (i) fees at a local technical or vocational training institute of their choosing, and (ii) tools and materials for practicing a craft.
 
The average applicant group had 22 members. Group cash transfers averaged nearly UGX 12.8 million (US$7,108), and varied by both group size and group request. The average transfer size per member was UGX 673,026 (US$374) – more than 20 times the average monthly income of the youth at the time of the baseline survey.
 
Due to vast oversubscription, the 535 eligible groups were selected at random, using a lottery, to either receive the YOP program or be part of the comparison group. A baseline survey was conducted with 2601 individuals in 2008, and 87 percent were successfully followed and interviewed in the endline surveys two and four years later.
 
Results and Policy Lessons:
Overall, the program seemed to have strong economic effects. Four years later, beneficiaries of the YOP program had 41% higher income and were 65% more likely to practice a skilled trade, such as carpentry, metalworking, tailoring, or hairstyling. Hours worked were 17% higher, nearly entirely accounted for by these new professions – while most still farmed part-time, hours spent in agriculture were not different. They were also 40% more likely to keep records, register their business, and pay taxes.
 
Within the sample, gains were highest for those who had the highest initial credit constraints, those with fewest initial assets and access to loans. The effects were particularly strong for women. Women who received the cash grants four years later had 84% higher incomes than women who did not, while men were earning 31% more than their counterparts in the comparison group. This gender difference may reflect particular capital constraints faced by women.
 
While employment programs including this one are often implemented by governments with the aim of reducing social instability or promoting cohesion, the data show no evidence for impacts in these domains. After four years there were no measurable differences in cohesion, aggression, or community and political participation between participants in the YOP program and those in the comparison group.
 
Overall, the data show that the poor used the money effectively; investing in training and tools needed to start businesses and experienced a significant growth in income, even after four years. Even though impacts in social domains were negligible, the economic outcomes show the potential of alleviating capital constraints for spurring economic growth among the poor. 
 
Read the full paper here.
 
A midterm policy report here and policy note by the World Bank here were based on the initial 2-year follow up data.
 
[1] Fafchamps, M., McKenzie, D., Quinn, S., Woodruff, C., 2011. When is capital enough to get female microenterprises growing? Evidence from a randomized experiment in Ghana. Unpublished working paper.

Enterprises for Ultra-poor Women After War: The WINGS Program in Northern Uganda

What’s holding back impoverished women? Can small grants programs help the most vulnerable women develop sustainable livelihoods? Do employment and poverty relief empower them and improve their lives? This evaluation assessed the impact of a program that gave cash grants and basic business skills training to the poorest and most excluded women in post-war northern Uganda. The program led to dramatic increases in business and reductions in poverty. Despite these economic gains, however, there was little change in social integration, physical or mental health, or empowerment.

Find a policy note with more detail here and a full in-depth policy report here (PDFs)
 
Policy Issue:
According to one view, women have the ability to run businesses and make profits, but they are held back by too few assets, too little access to loans, too few skills, and a host of social barriers. What happens, then, when these economic barriers are removed? This study evaluates a program that gives cash, business skills training, and ongoing advising to some of the poorest women in the world, in northern Uganda, to understand its effect on new business development and poverty.
 
Another view holds that for women, with economic success comes empowerment - more independence, more decision-making power in the household, and the freedom to leave abusive relationships. This study also tests whether an entrepreneurship program that reduces poverty also empowers the women in other aspects of life.
 
Evaluation Context:
The study takes place in northern Uganda, which is emerging from twenty years of conflict and displacement. Young women and girls in particular suffered economically and educationally from the war. The women who participated in this study were displaced from their homes and lands for years, and are returning and rebuilding a life. Thus this study can inform strategies for post-war reconstruction for women and for the society in general.
 
In 2007, the NGO AVSI Uganda and two of the IPA Investigators surveyed more than 600 young females aged 14 to 35 affected by the conflict in northern Uganda, including more than 200 women formerly abducted by an armed group. The evidence from the survey, along with program experience among NGOs in northern Uganda, suggests that the development of new economic opportunities and building social capital will be crucial ingredients in reducing poverty and improving the health, education and psychosocial well-being of youth, especially young women. 
AVSI and the investigators worked together to design a program that would relieve the most serious economic constraints on women: The Women’s Income Generating Support (WINGS) program.
 
Description of the Intervention:
AVSI identified the 15 poorest and most vulnerable women in 120 villages that they wanted to support - 1800 in all. To each, they delivered WINGS’ three core components:
1.       Four days of business skills training (BST)
2.       An individual start-up grant of roughly $150
3.       Regular follow-up by trained community workers
Additional optional components of the program include group formation, training, and self-support; and spousal inclusion, training, and support. Based on records provided by AVSI, the total cost of the intervention is estimated at approximately $688 per person.
 
Evaluation Design:
The evaluation combined a randomized design with qualitative data collection. AVSI could help no more than 900 people in 60 villages at first - serving 900 already required them to triple their usual capacity. Thus AVSI and IPA held public lotteries with village leaders. 60 villages were selected to participate immediately, while the remaining 60 participated 18 months later. This design allowed for assessing 18-month impacts by comparing women in participating villages to those just about to receive the program.
 
Results:
Economically, the program was transformative. For example:
 
Cash Earnings: Earnings nearly doubled. For the average WINGS beneficiary, monthly cash income increased by UGX 16,211 to 32,692 UGX, a 98% increase over controls. In absolute terms, an increase of UGX 16,211 does not seem large (about $6.50 a month at market exchange rates). However, relative to the average income in the control group, UGX 16,481 ($6.60), it is huge. 
 
Consumption, Assets, and Savings: Participants in the WINGS program had a 33% increase in household spending, a value of UGX 11,741 ($4.72). There is also an increase in wealth, and the results imply that WINGS clients substantially increase their durable assets. Savings for program beneficiaries tripled on average, going from UGX 40,740 ($16.36) to UGX 169,862 ($68.22). 
 
These economic gains, however, were not matched by gains in health or empowerment. In fact, there was almost no effect on non-economic measures. For instance:
 
Physical and mental health: There was no significant difference in psychological distress. Women in both the program and comparison groups reported a reduction in psychological distress over time, which is not surprising because the overall quality of life in northern Uganda improved after war and displacement. Women in the WINGS group did not improve more or faster, however. If anything, they were sick about a half a day more in the previous month. 
 
Child investments: Woman are often targeted by anti-poverty programs because they are believed to be more likely than men to use the profits to benefit the household, especially children’s education and health. Women in the program spent slightly more on children’s health and education, but there was no corresponding improvement in children’s health status or school enrollment, at least after 18 months.
 
Empowerment: The conventional wisdom also assumes that lending to women will enhance their status in the household. Data from this study, however, showed no evidence of resulting empowerment for women in household decision-making, independence, gender attitudes, or rates of intimate partner violence. This pattern has been seen before, and is often referred to as the “impact-paradox.” 
 
Overall, the WINGS program impacted women’s economic standing significantly, but the data show that translating these gains into improvements in psychological health, physical health, or empowerment is more complex.
 
For more, you can read a first person account of the project on the Freakonomics Blog.

Ultra Poor Graduation Pilot in Ghana

Can an intensive package of support lift the ultra poor out of extreme poverty to a more stable state? This 24-month program provides beneficiaries with a holistic set of services including: livelihood trainings, productive asset transfers, consumption support, savings plans, and healthcare. By investing in this multifaceted approach, the program strives to eliminate the need for long-term safety net services. Spanning seven countries on three continents, the Ultra Poor Graduation program is being piloted around the globe. IPA is conducting randomized evaluations  in IndiaPakistanHondurasPeruEthiopiaYemen, and Ghana to understand the impact of this innovative model.

Policy Issue:

Households well below the poverty-line face an interrelated set of challenges, each of which colludes to keep families in extreme poverty. These families are food insecure, do not have access to financial services, have few assets, savings, and inadequate access to healthcare, and often cannot afford education for children or need children to work. Without many opportunities or tools with which to change their situation, these households are vulnerable to shocks, such as bad harvests, and often dependent on charitable or government services for basic food support during lean seasons.

Graduating from Ultra Poverty (GUP) uses the Ultra Poor Graduation model, developed by BRAC as part of its Targeting the Ultra Poor Program in Bangladesh, to confront extreme poverty by offering a holistic set of services. The model addresses the varied needs of households in extreme poverty by providinga sequenced set of services, including consumption support, productive asset transfer, livelihood training, savings services, and healthcare. This approach is based on the premise that beneficiaries require intensive support, beyond financial services, to make a sustainable change out of extreme poverty. In Ghana, the GUP evaluation provides an opportunity to measure the impact of the savings component of this program.

Making weekly visits and providing a holistic bundle of services is costly. Evidence suggests that poor households, who are resource constrained, may be able to improve their economic welfare with improved financial products like savings accounts. The Savings Out of Ultra Poverty (SOUP) program in northern Ghana provides households with the opportunity to save money in a secure account through a weekly Susu collection program to build capital for future expenses, providing an opportunity to learn whether savings alone can make a difference for households in extreme poverty.

By comparing the impact of the GUP and SOUP interventions, this study will help determine the impact of savings alone as well as savings when combined with a holistic package of services and which approach is more cost effective in improving household economic and social outcomes in the short and medium term.

Context of the Evaluation:

In Ghana, the GUP and SOUP programs are being implemented in 155 communities in the districts of Tamale Metro, East Mamprusi, and Bulsa in the Northern and Upper East Regions.  Presbyterian Agricultural Services (PAS), a local organization with experience delivering a wide range of services relating to agriculture, health, and saving, is implementing both programs with the support of IPA and in partnership with local rural banks. IPA is also conducting the impact evaluation.

The GUP and SOUP programs serve women in the poorest households of selected communities. At the time of the baseline 84 percent of these women were illiterate, 18 percent had a household member with access to some sort of paid work, 66 percent lived in houses with mud or sand flooring, 93 percent had houses with thatched roofs and nearly all households relied primarily on subsistence farming.

Description of Intervention & Evaluation:

Households in selected communities were identified using a Participatory Wealth Ranking (PWR) process where villagers were asked to collectively rank the economic status of their community members.  Field officers confirmed the poverty status of eligible families and households. Communities were then randomly assigned to receive GUP, SOUP or to serve as comparison group with no intervention. Half of the eligible GUP households were also randomly assigned to receive weekly Susu collection as part of the package of services, and half of the SOUP households received a 50 percent match on any savings deposits made.   GUP and SOUP household receiving savings services are visited weekly by PAS field agents like “Susu” or “small small moneys” agents who collect savings for safe keeping.  PAS field agents deposit savings in household bank accounts and do not charge additional fees. Transactions are recorded for each household in a passbook provided by the bank.  Clients can withdraw money at any time by visiting a local bank branch.

GUP households receive consumption support during the lean season, an asset to jump-start a new entrepreneurial venture, membership to the National Health Insurance Scheme and weekly training with support from field staff throughout the 2-year program. Households are also supported by community support committees, connected to health services, and receive assistance in opening an account a local bank.

Households selected to receive the SOUP program receive savings accounts and weekly Susu collection services only – without all of the other components of the original Ultra Poor Graduation program. Half of the SOUP participants also receive a 50 percent match of all weekly savings deposits up to GHS 1.50 ($0.88 US) per week. There is no minimum or maximum to the amount that clients can save each week.

By disaggregating the savings component from the rest of GUP program both by randomly offering savings accounts with the original model and creating a savings-only program, researchers will be able to examine the overall importance of savings accounts in assisting ultra poor households.  Furthermore, the matched savings intervention will allow analysis of the incentives on participant savings.  Specifically, researchers will be able to determine whether households are already saving the maximum amount possible, or if incentivizing savings can further increase deposits.

Results:

Results forthcoming.

For additional information on the Ultra Poor Graduation Pilots, click here.

Ultra Poor Graduation Pilot in Yemen

Can ultra poor households in Yemen graduate from extreme poverty with help from a holistic set of services? This 24-month program provides beneficiaries with a holistic set of services including: livelihood trainings, productive asset transfers, consumption support, savings plans, and healthcare. By investing in this multifaceted approach, the program strives to eliminate the need for long-term safety net services. Spanning seven countries on three continents, the Ultra Poor Graduation program is being piloted around the globe. IPA is conducting randomized evaluations in IndiaPakistanHondurasPeruEthiopiaYemen, and Ghana to understand the impact of this innovative model.

Policy Issue:

Governments have often attempted to address the needs of the ultra poor by offering consumption support that is costly and offers no clear pathway out of food insecurity. The Ultra Poor Graduation Pilots attempt to apply a model, developed by BRAC in Bangladesh, which recognizes that the ultra poor need the "breathing space" that is provided by temporary consumption support, but that public funds may be better used to build households’ capacities to maintain a sustainable livelihood. The idea is that this initial assistance, lasting two years, will place households securely on the first rung of the development ladder, which they can then climb with the help of appropriate development strategies. The model incorporates a comprehensive package of services: a productive asset (such as chickens or goats), consumption support, livelihood trainings, healthcare, and financial services. Ideally this wide set of support services will help households to weather any shocks they may face along during their climb out of ultra poverty.

This project is a part of a set of evaluations, in partnership with CGAP and the Ford Foundation, that intends to determine whether the model, pioneered in Bangladesh, is effective in a range of contexts.

Context of the Evaluation:

Located on the tip of the Arabian Peninsula, Yemen faces economic challenges. Food insecurity, aggravated by a scare supply of water, leaves 32 percent of the country undernourished [1].  Over 45 percent of the population lives under $2 US a day and about 17 percent lives under $ 1.25 US a day [2]. The Social Welfare Fund (SWF), the Yemeni welfare department, and the Social Fund for Development (SFD), a government-run development agency, have partnered with IPA to pilot the Graduation Model in three governorates of southern Yemen.

Description of the Intervention:

The Graduation Model in Yemen works in accord with the SWF welfare system.  All households in the sample frame come from the SWF welfare lists and receive an average quarterly stipend of 3,000 YR ($15 US).  The poorest households are identified using the Progress Out of Poverty Index and are verified as the poorest during SWF field officer visits.  These households are then randomly assigned to either a treatment or comparison group. Beneficiaries in treatment households receive training on an income generating activity such as, sewing, raising livestock, or petty trading.  As households’ income and food consumption stabilizes, beneficiaries are required to open a savings account at the local post office and are encouraged to reach a savings goal of 10,750 YR (about $ 50US) by the end of the two year program. In addition, these ultra poor households are monitored throughout the program with weekly visits from field officers and receive additional trainings on confidence building, social integration, and sanitation practices.

Results and  Policy Lessons:

Results forthcoming.

For additional information on the Ultra Poor Graduation Pilots, click here.

 

[1]World Bank, “Yemen Country Brief

[2] The World Bank, “Yemen

Vocational Education Voucher Delivery and Labor Market Returns in Kenya

How effective is vocational training in Western Kenya? This study leverages a longitudinal survey to examine the impact on individuals with different childhood and background characteristics. Individuals are invited to apply (and then randomly selected) for a tuition voucher. The study will also measure the demand for vocational training, and the difference between public and private sector training institutes. 

Policy Issue: 

Youth underemployment, especially among less educated populations, has the potential to create significant social unrest and perpetuate poverty. However, little is known about how best to help youth find jobs and smooth the school-to-work transition, particularly in less developed countries. One would-be tool for expanding the labor market opportunities in these settings is vocational education, which could help students learn a trade and acquire the skills needed to take advantage of employment opportunities, and create successful small businesses. However, credible research on the economic returns to vocational schooling in poor countries remains scarce.

Context of the Evaluation:

The introduction of free primary education in Kenya in 2003 prompted a large influx of pupils previously not enrolled in school. As these pupils complete their primary schooling in the coming years, Kenya will face unprecedented numbers of primary school graduates competing for limited seats in traditional secondary schools. Vocational education is one promising avenue for these youths. Increasing vocational education has the potential to help address unemployment issues for new primary school graduates by providing students with the skills needed for employment, even without obtaining a secondary school diploma. Vocational training may also help to address the problem of underemployment among youth who exited the academic schooling system before 2003. However, there is little empirical evidence on the impacts of vocational education on employment, salary, or consumption for individuals with different characteristics and backgrounds, for instance, by gender, family background, or individual cognitive ability.

Details of the Intervention:

The program was launched in 2008 with the recruitment of 2,163 out-of-school Kenyan youths (roughly 18 to 26 years old) who had participated in the Kenya Life Panel Survey. In order to be included in the sample, applicants were required to attend two meetings on the program, participate in a short survey regarding their expected returns, complete a form ranking their preferred schools and courses, and submit a letter of support from either a local official or a school official. Applicants were then entered into a lottery to determine if they would receive a vocational training voucher worth up to approximately US$325, an amount sufficient to fully, or almost fully, cover the tuition costs for most private vocational education programs and government-run rural village polytechnics.

Among the voucher winners, a randomly selected half received vouchers that could be used only in government supported public vocational training institutes, while the other half received unrestricted vouchers that could be used in either public centers or in the local private vocational training sector. Once winners were informed of which type of voucher they were eligible for, these young adults were able to access the tuition voucher, greatly reducing the cost (close to zero) of vocational education. The impact evaluation tracks these individuals (both voucher winners and non-winners) over time to evaluate take-up of vocational education, and its impacts on labor market and other life outcomes. The division of the treatment group into those with restricted versus unrestricted vouchers, combined with detailed panel data collection of individuals and institutions, will allow researchers to estimate the additional labor market returns of having access to the private vocational training sector. 

Results and Policy Lessons: 

Results forthcoming.

 

Ultra Poor Graduation Pilot in India

Can an intensive package of support lift the ultra poor out of extreme poverty to a more stable state? This 24-month program provides beneficiaries with a holistic set of services including: livelihood trainings, productive asset transfers, consumption support, savings plans, and healthcare. By investing in this multifaceted approach, the program strives to eliminate the need for long-term safety net services. Spanning seven countries on three continents, the Ultra Poor Graduation program is being piloted around the globe. IPA is conducting randomized evaluations in IndiaPakistanHondurasPeruEthiopiaYemen, and Ghana to understand the impact of this innovative model.

Policy Issue: 

Governments have often attempted to address the needs of the ultra poor by offering consumption support that is costly and offers no clear pathway out of food insecurity. The Ultra Poor Graduation Pilots attempt to apply a model, developed by BRAC in Bangladesh, which recognizes that the ultra poor need the "breathing space" that is provided by temporary consumption support, but that public funds may be better used to build households’ capacities to maintain a sustainable livelihood. The idea is that this initial assistance, lasting two years, will place households securely on the first rung of the development ladder, which they can then climb with the help of appropriate development strategies. The model incorporates a comprehensive package of services: a productive asset (such as chickens or goats), consumption support, livelihood trainings, healthcare, and financial services.Ideally this wide set of support services will help households to weather any shocks they may face along during their climb out of ultra poverty.

This project is a part of a set of evaluations, in partnership with CGAP and the Ford Foundation, that intends to determine whether the model, pioneered in Bangladesh, is effective in a range of contexts.

Context of the Evaluation: 

Over 30% of West Bengal’s 82 million residents are believed to live below the poverty line, and an estimated 18% of the wealthiest rural citizens actually hold “below poverty line” cards. Murshidabad is one of the poorest districts of West Bengal, and is ranked 15 out of 17 in terms of the Human Development Index. Over 70% of the population of West Bengal lives in rural areas.

Bandhan, a Kolkata-based microfinance institution, was launched in West Bengal in 2002 to address economic and social poverty by providing greater access to formal credit. Due to rapid growth over the past seven years it now has an estimated client base of over 1.2 million borrowers in 12 states in India, providing a variety of products including loans for microenterprises and agriculture.

Details of the Intervention: 

This evaluation will help determine whether income generating assets indeed prove to be beneficial to ultra poor households, and what kind of asset provision proves most successful. The researchers will assess the impact of Bandhan’s newest venture: an outreach into ultra-poor households based on the provision of assets rather than cash and a holistic set of services. The first step in the process was to determine who was actually in this category. This was done through social mapping and wealth ranking using Participatory Rural Appraisals (PRAs) in each of the target villages.

After a second verification of selected participants, beneficiaries were divided into a comparison and treatment group, of which the randomly selected treatment individuals received a grant of US$100 to purchase a productive asset of their choice. These assets included both farm and non-farm assets, although livestock, such as cows or goats, was the most popular selection. Households were also given access to a fund for health expenditures – a feature that may reduce their vulnerability.

Bandhan will meet with the selected households on a weekly basis for 18 months to check their status and provide supplemental business-skills training. Upon completion of this training, all households will be surveyed to determine program impacts. One year later, a second follow up survey will be conducted to evaluate the long term impacts of the graduation program. Measured outcomes will include income, assets, school attendance of children, health, and food security.

Results:

Forthcoming

After completion of this evaluation, Bandhan in partnership with Axis Bank is scaling up the program in West Bengal.

For additional information on the Ultra Poor Graduation Pilots, click here.

Incentivizing Safe Sex in Rural Tanzania

Researchers examined whether making cash payments conditional on testing negative for sexually transmitted infections (STIs) can improve safe sex practices among 18-30 year olds. Results reveal that giving cash payments of US$20, conditional on testing negative for sexually transmitted diseases, significantly reduced STI infection rates among young adults in Tanzania.

Policy Issue:

In 2009, approximately 2.8 million people were newly infected with HIV/AIDS, but it is estimated that only 40 percent of this population is receiving treatment. The extraordinarily high social and economic costs of the current HIV and AIDS crisis suggest that prevention may be far cheaper than treatment. However, existing prevention strategies, such as large-scale behavior change interventions, have had a limited impact on the HIV/AIDS infection rate. Conditional cash transfers (CCTs) have been used in a variety of settings as a means of incentivizing socially desirable behavioral change such as school enrollment or attending at preventive healthcare check-ups. Can CCTs be used to prevent people from engaging in unsafe sex?

Context of the Evaluation:

While the rate of HIV new infection has decreased substantially over the past decade, HIV/AIDS is still a major problem, particularly in sub-Saharan Africa, which bears an inordinate share of the global HIV burden. In Tanzania, where new incidences of HIV have declined over the past five years, 5.6 percent of the population is still infected with HIV/AIDS. Tanzania’s neighbors to the south have fared far worse - Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, South Africa, Swaziland, Zambia, and Zimbabwe are home to 34 percent of the global population living with HIV, and experienced 31 percent of all new HIV infections in 2009.[i] Effective policies to encourage preventive behavior are desperately needed in this area.

Description of the Intervention:

Researchers examined whether making cash payments conditional on testing negative for sexually transmitted infections (STIs) can improve safe sex practices among 18-30 year olds.

In the spring of 2009, 2409 individuals were randomly selected from the Ifakara Health and Demographic Surveillance System sample and then assigned to either a treatment group, where they would receive a periodic cash grant if they tested negative for STIs, or a comparison group. Participants in the treatment group were then randomly allocated into one of two sub-treatments: low-value vs. high-value CCTs. In the end, 1,124 participants were assigned to the comparison group; 660 were assigned to receive the low-value CCT of approximately US$10 per testing round; and 615 were assigned to receive the high-value CCT of US$20 per testing round.

All participants were tested for STIs at baseline and then every 4 months for one year. Participants in the two treatment arms were eligible to receive the cash transfer payment at each testing round if they tested negative for a set of curable STIs. The STIs tested were chlamydia, gonorrhea, trichomonas, and M. genitalium; all of these diseases are transmitted through unprotected sexual contact and therefore served as a proxy for risky sexual behavior and vulnerability to HIV infection. HIV testing was conducted at baseline and at month 12, but payments were not conditioned on those results because of local sensitivities.

Individuals in the treatment arms who tested positive for any of the curable STIs did not receive the conditional cash transfer but were eligible to continue in subsequent rounds after having been treated and cured of the infection. Anyone who tested positive for a STI, in either the comparison or treatment groups, was offered counseling and free STI treatment through health facilities of the district Ministry of Health.

Results and Policy Lessons:

After four and eight months in the program, there was no significant difference in the STI infection rate between either of the treatment groups and the comparison group. However, by month twelve, the high-value cash transfer led to a significant reduction in STI infection. Between month four and month twelve, the number of people testing positive for STI in the high-value conditional cash transfer arm decreased by 19 percent. In contrast, during the same time period, the number of STI-positive individuals increased by 19 percent in the low-value conditional cash transfer arm and by 13 percent in the comparison group.

The absence of significant impacts after four and eight months suggests that the impact of the conditional cash transfer may take time to materialize, perhaps because it is not easy to extricate oneself from complicated sexual relationships, or perhaps because participants needed time to become accustomed to (and trust) the incentive mechanism.



[i] UNAIDS (2010) “UNAIDS Report on the Global AIDS Epidemic.”

Training Women to Grow Microenterprises

Previous work in Sri Lanka has found very low returns to capital for female-owned microenterprises, which appears to be in part due to women operating businesses in female-dominated industries with low efficient scale and little scope for growth. This project aims to evaluate the role of business training and capital in getting women who are thinking about starting a business to start it in industries with greater scope for growth, and getting women in these low return industries to switch to more profitable sectors.

Separate business training courses are being offered to randomly-selected out of the labor force women who express an interest in entering the labor force in the next year, and to randomly-selected women currently in business in female-dominated low-return occupations. Half of those who complete the training will also receive a cash grant. One of the innovations of this work is not working with the existing clientele of a microfinance organization, but rather in seeing what the returns to such services are to the average poor woman. This informs us of the potential demand for such services, and can help identify the segments of the population not currently well-served by existing institutions.

Returns to Capital among Microenterprises in Ghana

A recent randomized experiment in Sri Lanka found very high returns to capital for male-owned microenterprises, but zero return to female microenterprises. We are replicating this experiment in Ghana, a country with high levels of female participation in self-employment, to see if the results generalize to a different cultural context. The project will also collect much more detailed information about gender roles and empowerment, and occupational choice to test between several explanations for low returns to female-owned enterprises.

The study is being conducted with 800 microenterprises, half male-owned and half female-owned. Half of these will be randomly given grants of 150 cedis (approximately $120), half in the form of cash grants and half as equipment for their enterprises.

David McKenzie
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