Graduating the Ultra-Poor in Peru

More than one fifth of the world’s population lives on less than US$1.25 per day. While many credit and training programs have not been successful at raising income levels for these ultra-poor households, recent support for livelihoods programs has spurred interest in evaluating whether comprehensive “big push” interventions may allow for a sustainable transition to self-employment and a higher standard of living. To test this theory, in six countries researchers evaluated a multi-faceted approach aimed at “graduating” the ultra-poor from poverty. They found that generally the approach had long-lasting economic and self-employment impacts and that the long-run benefits outweighed their up-front costs. In Peru, the gains were smaller than in most other countries.

Policy Issue:

More than one fifth of the world’s population lives on less than US$1.25 per day. Many of these families depend on insecure and fragile livelihoods, including casual farm and domestic labor. Their income is frequently irregular or seasonal, putting laborers and their families at risk of hunger. Self-employment is often the only viable alternative to menial labor for the ultra-poor, yet many lack the necessary cash or skills to start a business that could earn more than casual labor.

In the past, many programs that have provided ultra-poor households with either credit or training to alleviate these constraints have not been successful at raising household income levels on average.  However, in recent years, several international and local nongovernmental organizations have renewed their support for programs that foster a transition to more secure livelihoods. Combining complementary approaches—the transfer of a productive asset, training, consumption support, and coaching— into one comprehensive program may help spur a sustainable transition to self-employment. To better understand the effect of these programs on the lives of the ultra-poor, researchers coordinated to conduct six randomized evaluations in Ethiopia,  GhanaHondurasIndiaPakistan, and Peru.

Context of the Evaluation:

In Peru, researchers partnered with implementing organizations Plan International-Peru and Asociación Arariwa. The study focused on households in the rural communities of Canas and Acomayo, located in the department of Cusco, which is among the poorest departments in Peru.[1] To select the poorest members of the communities, the project team conducted a Participatory Wealth Ranking, in which villagers collectively ranked households according to their wealth during a community meeting. Asociación Arariwa conducted a short survey afterwards to verify the results of the ranking.

Details of the Intervention:

Researchers conducted a randomized evaluation to test the impact of a two-year comprehensive livelihoods program (“the Graduation approach”) on the lives of the ultra-poor in Peru. The approach was first developed by the Bangladeshi NGO BRAC in 2002 and has since been replicated in several countries.

In Peru, an initial sample of 2,284 households was spread out across 86 villages. In half of the villages, households were randomized to either receive the program or not. The households that did not receive the program but had neighbors that did, served as a sub-comparison group to measure “spillover” effects.  The remaining 43 villages were randomly selected to be pure comparison villages (no one in the village received the program). The program consisted of six complementary components, each designed to address specific constraints facing ultra-poor households:

1. Productive asset transfer:One-time transfer of a productive asset valued at 1,200 PEN (2014 PPP US$854). Most participants (64 percent) chose guinea pigs, a quarter picked hens, and small number picked cattle (4 percent). 

2. Technical skills training: Training on running a business and managing their chosen livelihood. For example, households who selected livestock were taught how to rear the livestock, including vaccinations, feed and treatment of diseases.

3. Consumption support: Regular food support is a component of the Graduation approach, but in this study it was not unique to the treatment group. A governmental cash transfer program called Juntos already existed prior to the program. Households not enrolled in the Juntos program received monthly cash transfers of 100 PEN  (2014 PPP US$72). Households enrolled in Juntos (in both treatment and comparison groups) received cash transfers of 200 PEN (2014 PPP US$143.33) every two months from Juntos.

4: Health education: Information about nutrition, healthy practices, and prenatal health (delivered during training sessions).

5. Savings account:Households were encouraged to open savings accounts with Banco de Nacion or deposit group savings with Arariwa Microfinance.

6. Households visits: Home visits by Arariwa staff every six weeks over 24 months to provide to provide accountability, coaching, and encouragement.

The Graduation program began in early 2011 and continued until mid-2013. Researchers conducted the first endline survey after the program ended, as well as a second endline survey one year later (mid-2014).

Results and Policy Lessons:

Across all six countries, researchers found that the program caused broad and lasting economic impacts. Treatment group households consumed more, had more assets, and increased savings. The program also increased basic entrepreneurial activities, which enabled the poor to work more evenly across the year. While psychosocial well-being improved, these noneconomic impacts sometimes faded over time. In five of the six studies, long-run benefits outweighed their up-front costs. However, for households that received the Graduation program in Peru, one year after the Graduation program ended the gains were smaller, compared to most other countries:

Economic impacts: Households that received the program saw an 8 percent increase in food consumption (to 2014 PPP US$82.05 a month on average), but no significant increases in non-food consumption or durable good expenditures. They did not experience a significant increase in assets or food security, though they saved 2014 PPP US$220.10 a month on average, 26 percent more than households in the comparison group.

Self-employment: Households that received the program earned 2014 PPP US$307.30 in revenue from livestock on average, a 16 percent increase relative to the comparison group, but they did not experience an increase in agricultural income. Nor did they spend any more time on productive activities than comparison group households.

Psychosocial wellbeing: Households in Peru reported being physically in better health and happier than households that did not receive the program.

Political Involvement:Households did not experience significant gains in political involvement or women’s empowerment in Peru relative to the comparison group. 

Cost-benefit analysis: Compared to less comprehensive interventions, the Graduation program had relatively high up-front costs. Researchers calculated total implementation and program costs to be US$2,604 per household in Peru (2014 PPP US$5,742). However, estimated benefits from consumption and assets growth amount to 2014 PPP US$8,380 per household, representing an overall 146 percent return.



[1] “Descriptive Statistics from the Extreme Poverty Graduation Program Baseline in Cusco, Peru.” October 2011. Accessed at: http://www.microfinancegateway.org/sites/default/files/publication_files/tup_peru-baseline_report_pdf.pdf

Graduating the Ultra-Poor in Honduras

More than one fifth of the world’s population lives on less than US$1.25 per day. While many credit and training programs have not been successful at raising income levels for these ultra-poor households, recent support for livelihoods programs has spurred interest in evaluating whether comprehensive “big push” interventions may allow for a sustainable transition to self-employment and a higher standard of living. To test this theory, researchers evaluated a globally implemented “Graduation” approach to measure its impact on the lives of the ultra-poor. They found that the approach had long-lasting economic and self-employment impacts and that the long-run benefits, measured in terms of household expenditures, outweighed their up-front costs. Honduras was the only country where long-run benefits did not outweigh their up-front costs.

Policy Issue:

More than one fifth of the world’s population lives on less than US$1.25 per day. Many of these families depend on insecure and fragile livelihoods, including casual farm and domestic labor. Their income is frequently irregular or seasonal, putting laborers and their families at risk of hunger. Self-employment is often the only viable alternative to menial labor for the ultra-poor, yet many lack the necessary cash or skills to start a business that could earn more than casual labor.

In the past, many programs that have provided ultra-poor households with either credit or training to alleviate these constraints have not been successful at raising household income levels on average.  However, in recent years, several international and local nongovernmental organizations have renewed their support for programs that foster a transition to more secure livelihoods. Combining complementary approaches—the transfer of a productive asset, training, consumption support, and coaching— into one comprehensive program may help spur a sustainable transition to self-employment. To better understand the effect of these programs on the lives of the ultra-poor, researchers coordinated to conduct six randomized evaluations in Ethiopia,  Ghana, Honduras, IndiaPakistan, and Peru.

Context of the Evaluation:

In Honduras, researchers partnered with PLAN International Honduras and Organización de Desarollo Empresarial Feminino Social (ODEF), a local microfinance institution. The study focused on poor households with children who were not generally receiving microcredit or development assistance. Those ultimately selected to participate were identified as the poorest members of the community through a participatory wealth ranking process. Within the sample, the median daily per capita consumption was 2014 PPP US$1.32, with 60 percent of households consuming less than US$1.25 per person per day. At the start of the study, around 40 percent of households reported that some adults sometimes had to skip meals, and 20 percent reported the same for children.

Details of the Intervention:

In partnership with PLAN International Honduras and ODEF, researchers conducted a randomized evaluation to test the impact of a two-year comprehensive livelihoods program (called the "Graduation approach”) on the lives of the ultra-poor. This approach was first developed by Bangladeshi NGO BRAC in 2002 and has since been replicated in several countries. From a sample of 2,403 households, researchers randomly assigned one-third to the treatment group, and two-thirds to the comparison group, which would not receive the program.

The intervention consisted of six complementary components, each designed to address specific constraints facing ultra-poor households:

1. Productive asset transfer: Participants received a one-time transfer of a productive asset valued at 4,750 Honduran Lempiras (2014 PPP US$537). Most (83 percent) participants chose chickens, while 6 percent selected pigs and 5 percent selected fish.

2. Technical skills training: Household were trained in running a business and managing their chosen livelihood. For example, households who selected chickens were taught how to care for them, including feed and shelter requirements.

3. Consumption support: Households received a one-time food transfer worth 1,920 Honduran Lempiras (2014 PPP US$217) intended to cover the six-month lean season. This differed from most other countries, where participants received weekly or monthly cash stipends.

4. Savings: Households were required to open an ODEF savings account and received either savings matches or direct savings transfers.

5. Home visits: Program staff conducted weekly home visits to provide accountability, coaching, and encouragement.

6. Health: Households attended health, nutrition, and hygiene trainings.

The program began in 2009 and continued until 2011. Researchers conducted a first endline survey immediately after the program concluded,as well as a second endline survey around one year later.

Results and Policy Lessons:

Across all six countries, researchers found that the program caused broad and lasting economic impacts. Treatment group households consumed more, had more assets, and increased savings. The program also increased basic entrepreneurial activities, which enabled the poor to work more evenly across the year. While psychosocial well-being improved, these noneconomic impacts sometimes faded over time. In five of the six studies, long-run benefits outweighed their up-front costs.

General results: In Honduras, results varied significantly from overall findings: although livestock revenues increased, total and food consumption did not change, and asset ownership declined. Researchers believe this was primarily due to the fact that a large fraction of chickens, which most households received as their productive asset, died due to illness. At both the first and second endline surveys, treatment households reported an increase in revenue coming from chickens. However, most of the chickens had died by the time of the second endline survey, leading to a decline in overall assets owned relative to the comparison group, and there was no difference in consumption among households who participated in the Graduation program and those that did not.

Cost-benefit analysis: As the program did not have lasting positive impacts on consumption and asset holdings, Honduras was the only evaluated country in which the program’s costs outweighed participant benefits. Researchers calculated total implementation and program costs to be US$1,335 per household (2014 PPP US$3,090). Estimated (lack of) benefits for four years of consumption and assets declines amounted to a loss of 2014 PPP US$6,118 per household, representing an overall negative return of 198 percent.

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.

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 detailed policy brief here (PDF) and the full paper 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.

More information can be found in the policy brief here (PDF) and full paper here.

Graduating the Ultra Poor in Pakistan

More than one fifth of the world’s population lives on less than US$1.25 per day. While many credit and training programs have not been successful at raising income levels for these ultra-poor households, recent support for livelihoods programs has spurred interest in evaluating whether comprehensive “big push” interventions may allow for a sustainable transition to self-employment and a higher standard of living. To test this theory, in six countries researchers evaluated a multi-faceted approach aimed at improving long term income of the ultra poor. They found that the approach had long-lasting economic and self-employment impacts and that the long-run benefits, measured in terms of household expenditures, outweighed their up-front costs. Here we summarize the Pakistan site, which had similar effects as the other successful sites.

Policy Issue:

More than a billion people live on less than US$1.25 per day. Many of these families depend on insecure and fragile livelihoods, including casual farm and domestic labor. Their income is frequently irregular or seasonal, putting laborers and their families at risk of hunger. Self-employment is often the only viable alternative to menial labor for the ultra poor, yet many lack the necessary cash or skills to start a business that could earn more than casual labor.

In the past, many programs that have provided poor households with either credit or training to alleviate these constraints have not been successful at raising household income levels on average.  However, in recent years, several international and local nongovernmental organizations have renewed their support for programs that foster a transition to more secure livelihoods. Combining complementary approaches—the transfer of a productive asset, training, consumption support, and coaching— into one comprehensive program may help spur a sustainable transition to self-employment. To better understand the effect of these programs on the lives of the ultra-poor, researchers conducted six randomized evaluations in Ethiopia,  GhanaHondurasIndia, Pakistan, and Peru.

Context of the Evaluation:

This study took place in the Coastal Sindh region of Pakistan. To implement the Graduation program, researchers partnered with Aga Khan Planning and Building Services Pakistan, Badin Rural Development Society, Indus Earth Trust, and Sindh Agricultural and Forestry Workers Coordinating Organization, who jointly implemented the Graduation program under the leadership and funding of Pakistan Poverty Alleviation Fund. To select the poorest members of the communities, the project team conducted a Participatory Wealth Ranking, in which villagers collectively ranked households according to their wealth during a community meeting. The ranking process was followed by a short survey to verify the results.

Details of the Intervention:

Researchers conducted a randomized evaluation to test the impact of a two-year comprehensive livelihoods program (“the Graduation approach”) on the lives of the ultra poor in Pakistan. The approach was first developed by the Bangladeshi NGO BRAC in 2002 and has since been replicated in several countries. From a sample of 1,299 households, researchers randomly assigned half to the treatment group, and half to the comparison group, which was not be eligible to receive the program.

The Graduation program consisted of six complementary components, each designed to address specific constraints facing ultra-poor households.

1.     Productive asset transfer: One-time transfer of a productive asset valued at 15,000 Pakistan rupees (2014 PPP US$1043.33). More than half of the households picked goats as their asset, while 11 percent chose to open shops, and 10 percent picked hens.

2.     Technical skills training: Training on running a business and managing their chosen livelihood. For example, households who selected livestock were taught how to rear the livestock, including vaccinations, feed and treatment of diseases.

3.     Consumption support: Monthly cash transfers of 1,000 Pakistan rupees (2014 PPP US$69.56) for the first year in the program.

4.     Health: Female health visitors provided basic health services including checkups, health and hygiene training, and medicine. More difficult and serious cases were referred to the nearest doctor.

5.     5. Savings account: Encouragement to save money at home, in boxes, or with Rotating Savings and Credit Associations (ROSCAs)

6.     6. Households visits: Weekly visits by local NGO staff for 24 months to provide to provide accountability, coaching, and encouragement. In some cases, these visits were reduced to a bi-weekly or monthly basis.

Researchers conducted the first endline survey immediately after the two-year program ended, as well as a second endline survey approximately 12 months later, a year after all program activities ended.

Results and Policy Lessons:

Across all six countries, researchers found that the program caused broad and lasting economic impacts. Treatment group households consumed more, had more assets, and increased savings. The program also increased basic entrepreneurial activities, which enabled the poor to work more evenly across the year. While psychosocial well-being improved, these noneconomic impacts sometimes faded over time. In five of the six studies, long-run benefits outweighed their up-front costs. In Pakistan, households that received the Graduation program experienced positive impacts in most areas:

Economic impacts:Average total monthly consumption among treatment households was 2014 PPP US$91.08, a 7 percent increase compared to the comparison group, while food consumption did not increase significantly.Households saw a 29 percent increase in the value of their total assets on average (valued, on average, at 2014 PPP US$1,188 as compared to comparison households’ average asset value of 2014 PPP US$918.00). Unlike in any of the other countries, in Pakistan households in the program borrowed significantly less than households in the comparison group.

Self-employment: Households experienced a 62 percent increase in revenue from livestock (to 2014 PPP US$70.50 a month) on average, but they did not experience significant gains in agricultural income or non-farm income, nor did they report any significant changes in how they allocated their time.

Psychosocial wellbeing: Households that participated in the program did not report feeling significantly happier or in any better health than those who did not participate.

Political involvement: Political involvement increased by one measure among participants in Pakistan; they were 31 percent more likely to be a member of a political party one year after the program ended. Women in treatment households did not experience any significant, lasting gains in empowerment.

Cost-benefit analysis: Compared to less comprehensive interventions, the Graduation program had relatively high up-front costs.Researchers calculated total implementation and program costs to be US$864 per household in Pakistan (2014 PPP US$5,962). However, estimated benefits from consumption and assets growth amount to 2014 PPP US$10,678 per household, representing an overall 179 percent return.

 

Graduating the Ultra-Poor in Ethiopia

More than one fifth of the world’s population lives on less than US$1.25 per day. While many credit and training programs have not been successful at raising income levels for these ultra-poor households, recent support for livelihoods programs has spurred interest in evaluating whether comprehensive “big push” interventions may allow for a sustainable transition to self-employment and a higher standard of living. To test this theory, researchers evaluated a globally implemented “Graduation” approach to measure its impact on the lives of the ultra-poor. They found that the approach had long-lasting economic and self-employment impacts and that the long-run benefits outweighed their up-front costs. Here we summarize the Ethiopia site, which had similar effects as the other successful sites.

Policy Issue:

More than one fifth of the world’s population lives on less than US$1.25 per day. Many of these families depend on insecure and fragile livelihoods, including casual farm and domestic labor. Their income is frequently irregular or seasonal, putting laborers and their families at risk of hunger. Self-employment is often the only viable alternative to menial labor for the ultra-poor, yet many lack the necessary cash or skills to start a business that could earn more than casual labor.

In the past, many programs that have provided ultra-poor households with either credit or training to alleviate these constraints have not been successful at raising household income levels on average.  However, in recent years, several international and local nongovernmental organizations have renewed their support for programs that foster a transition to more secure livelihoods. Combining complementary approaches—the transfer of a productive asset, training, consumption support, and coaching— into one comprehensive program may help spur a sustainable transition to self-employment. To better understand the effect of these programs on the lives of the ultra-poor, researchers coordinated to conduct six randomized evaluations in  Ethiopia,  GhanaHondurasIndiaPakistan, and Peru.

Context of the Evaluation:

In Ethiopia, researchers partnered with the Relief Society of Tigray (REST) and the Dedebit Credit and Savings Institution (DECSI). The study focused on participants in Ethiopia’s food-for-work program who belonged to households without any outstanding loans and with at least one member capable of work. A local food security task force narrowed eligibility further by choosing those they considered to be the poorest members of their community. Within the sample, the median total per capita consumption was 2014 PPP US$1.22 per day, with two-thirds of households consuming less than US$1.25 per day. Two-thirds of households reported that not everyone in the household got enough food.

Details of the Intervention:

In partnership with local implementing organization REST and microfinance institution DECSI, researchers conducted a randomized evaluation to test the impact of a two-year comprehensive livelihoods program (“the Graduation approach”) on the lives of the ultra-poor. This approach was first developed by Bangladeshi NGO BRAC in 2002 and has since been replicated in several countries. From a sample of 925 households, researchers randomly assigned half to the treatment group, and half to the comparison group, which would not be eligible to receive the program.

The intervention consisted of five complementary components, each designed to address specific constraints facing ultra-poor households:

1. Productive asset transfer: One-time transfer of a productive asset valued at 4,724 Birr (2014 PPP US$1,228). Most (62 percent) of participants chose sheep and goats, while 24 percent selected oxen and 10 percent selected bees.

2. Technical skills training: Training on running a business and managing their chosen livelihood. For example, households who selected livestock were taught how to rear the livestock, including vaccinations, feed and treatment of diseases.

3. Consumption support: Regular food support is a component of the Graduation approach, but in this study it was not unique to the treatment group. The entire sample received food support (valued at a maximum 2014 PPP US$26 per month) through a separate food-for-work program.

4. Savings: Households had DECSI bank accounts opened and were required to regularly deposit savings totaling 4,724 Birr (2014 PPP US$1,228) over the two years of the program; households were unable to withdraw funds until they reached this threshold.

5. Home visits: Weekly home visits by REST staff to provide accountability, coaching, and encouragement.

The Graduation program began in 2010 and continued until May 2012. Researchers conducted a first endline survey immediately after the program ended, as well as a second endline survey around one year later.

Results and Policy Lessons:

Across all six countries, researchers found that the program caused broad and lasting economic impacts. Treatment group households consumed more, had more assets, and increased savings. The program also increased basic entrepreneurial activities, which enabled the poor to work more evenly across the year. While psychosocial well-being improved, these noneconomic impacts sometimes faded over time. In five of the six studies, long-run benefits outweighed their up-front costs. In Ethiopia, specifically, researchers found similar effects:

Economic impacts: One year after the Graduation program ended, average total monthly consumption among treatment households was 2014 PPP US$47.50, an 18.2 percent increase over households in the comparison group. Food and durable goods spending were also higher than in the comparison group, and more households reported having enough food every day. An asset analysis also revealed larger values for both productive and household assets a year after the program ended. Treatment households had 2014 PPP US$2,657 in total asset values, 68 percent more than comparison group households. For treatment group households, measures of financial inclusion also increased. Graduation program households reported borrowing and saving at higher rates than comparison group households, with a 372 percent increase in average total savings to 2014 PPP US$345.

Self-employment:One year after the Graduation program ended, treatment group households reported spending 43 minutes per day on productive activities in addition to the average four hours among comparison group households. Graduation households also experienced a two-fold increase in livestock revenue relative to comparison group households.

Psychosocial wellbeing:Generally, the Graduation program did not affect measures of physical or mental health. There were no changes in illness, happiness, or stress, although treatment group households did report a smaller likelihood of feeling anxious or worried in the last year.

Political Involvement:There is some evidence that participation in the Graduation program increased political involvement. One year after the program ended, 38 percent of treatment group households reported being a member of a political party (compared to 33 percent for the comparison group) and 57 percent attended a village meeting in the last year (compared to 52 percent for the comparison group). Participation in the Graduation program did not improve women’s decision-making power.

Cost-benefit analysis: Researchers calculated total implementation and program costs to be US$884 per household (2014 PPP US$4,157). However, estimated benefits of consumption and assets growth amount to 2014 PPP US$10,805 per household, representing an overall 260 percent return on investment.

 

 

Graduating the Ultra-Poor in Ghana

More than one fifth of the world’s population lives on less than US$1.25 per day. While many credit and training programs have not been successful at raising income levels for these ultra-poor households, recent support for livelihoods programs has spurred interest in evaluating whether comprehensive “big push” interventions may allow for a sustainable transition to self-employment and a higher standard of living. To test this theory, in six countries researchers evaluated a multi-faceted approach aimed at “graduating” the ultra-poor from poverty. They found that the approach had long-lasting economic and self-employment impacts and that the long-run benefits, measured in terms of household expenditures, outweighed their up-front costs. Here we summarize the Ghana site, which had similar effects as the other successful sites.

Policy Issue:

More than one fifth of the world’s population lives on less than US$1.25 per day. Many of these families depend on insecure and fragile livelihoods, including casual farm and domestic labor. Their income is frequently irregular or seasonal, putting laborers and their families at risk of hunger. Self-employment is often the only viable alternative to menial labor for the ultra-poor, yet many lack the necessary cash or skills to start a business that could earn more than casual labor.

In the past, many programs that have provided ultra-poor households with either credit or training to alleviate these constraints have not been successful at raising household income levels on average.  However, in recent years, several international and local nongovernmental organizations have renewed their support for programs that foster a transition to more secure livelihoods. Combining complementary approaches—the transfer of a productive asset, training, consumption support, and coaching— into one comprehensive program may help spur a sustainable transition to self-employment. To better understand the effect of these programs on the lives of the ultra-poor, researchers conducted six randomized evaluations in Ethiopia,  Ghana, HondurasIndiaPakistan, and Peru.

Context of the Evaluation:

In Ghana, researchers partnered with implementing organizations Innovations for Poverty Action and Presbyterian Agricultural Services (PAS). The study took place in in the Northern and Upper East regions of Ghana, a region that is disproportionately poorer than the coastal south. Fifty-three percent of households in the study were living on US$1.25 a day or less when the study began, compared to 29 percent in Ghana as a whole. 

To select the poorest members of the communities, the project team conducted a Participatory Wealth Ranking, in which villagers collectively ranked households according to their wealth during a community meeting. PAS conducted a short survey afterwards to verify the results of the ranking.

Details of the Intervention:

Researchers conducted a randomized evaluation to test the impact of a two-year comprehensive livelihoods program (“the Graduation approach”) on the lives of the ultra-poor in northern Ghana. The approach was first developed by the Bangladeshi NGO BRAC in 2002 and has since been replicated in several countries. The Graduation program consisted of six complementary components, each designed to address specific constraints facing ultra-poor households:

In Ghana, researchers first randomly assigned villages composed of a total of 2,606 households, to one of two groups. One group served as a pure comparison group and was not offered the program. In the other group, 666 households were randomly assigned to receive the program. The other half of the households in that group did not receive the program, and served as a sub-comparison group to measure “spillover” effects on non-participating households living nearby. The program consisted of six complementary components, each designed to address specific constraints facing ultra-poor households:

1. Productive asset transfer:One-time transfer of a productive asset valued at GHS 300

(2014 PPP US$451). Forty-four percent of participants chose goats and hens, roughly a quarter picked goats and maize inputs, and small number picked shea nuts and hens (6 percent). 

2. Technical skills training: Training on running a business and managing their chosen livelihood. For example, households who selected livestock were taught how to rear the livestock, including vaccinations, feed and treatment of diseases.

3. Consumption support: During the lean season (14 out of 24 months), households received weekly cash transfers of GHS 4-6 (2014 PPP US$6.02- 9.03), depending on household size.
4. Health: Households were enrolled in the National Health Insurance Scheme and received health and nutrition education.                                                                                                  5. Savings account: Half of the Graduation households received savings accounts through the Savings Out of Ultra Poverty (SOUP) program, also implemented by PAS. When PAS staff  made their weekly visits, they collected deposits and households logged deposits.                       6. Households visits: Weekly visits by PAS staff to provide to provide accountability, coaching, and encouragement.

In order to test the relative effectiveness of the savings and asset transfer component, the researchers also randomly assigned a portion of households (733 households) to only receive the SOUP program, while another portion (329 households) only received the asset transfer component of the program. Half of those in the SOUP program (362 households) received a 50 percent match on their savings to test the impact of incentives to save.

Researchers conducted the first endline survey immediately after the two-year program ended, as well as a second endline survey around one year later.

Results and Policy Lessons:

Note: Results forthcoming from the relative effectiveness of the savings component (with and without incentives) and an asset transfer-only treatment.

Across all six countries, researchers found that the program caused broad and lasting economic impacts. Treatment group households consumed more, had more assets, and increased savings. The program also increased basic entrepreneurial activities, which enabled the poor to work more evenly across the year. While psychosocial well-being improved, these noneconomic impacts sometimes faded over time. In five of the six studies, long-run benefits outweighed their up-front costs. In Ghana, households that received the Graduation program saw similar effects one year after the program ended:

Economic impacts: Average total monthly consumption among treatment households was 2014 PPP US$33.62, an 11 percent increase over households in the comparison group. They spent $22.41 on food every month on average, 12 percent more than the comparison group.Households saw significant increases in asset holding and borrowed 58 percent more than those in the comparison group (2014 PPP US$35.60 monthly average), They also saved 2014 PPP US$16 a month on average, which was three times more than households in the comparison group.

Self-employment:Households experienced a 91 percent increase in non-farm income, earning 2014 PPP US$12.86 on average, as well as significant gains in livestock revenue, earning 2014 PPP US$40.60 a month on average, or 50 percent more than the comparison group.

Psychosocial wellbeing:Households that participated in the program did not report feeling significantly less stressed or happier than households in the comparison group.

Political involvement:Women in treatment households did not experience significant gains in empowerment in Ghana, and in fact experienced significantly less power in decisions about food in the household. However, treatment households did participate in more community meetings than those in the comparison group.  

Cost-benefit analysis:. Researchers calculated total implementation and program costs to be US$1,777 per household (2014 PPP US$5,408). However, estimated benefits of consumption and assets growth amount to 2014 PPP US$7,175 per household, representing an overall 133 percent return on investment.

Graduating the Ultra-Poor in India

More than one fifth of the world’s population lives on less than US$1.25 per day. While many credit and training programs have not been successful at raising income levels for these ultra-poor households, recent support for livelihoods programs has spurred interest in evaluating whether comprehensive “big push” interventions may allow for a sustainable transition to self-employment and a higher standard of living. To test this theory, researchers evaluated a globally-implemented “Graduation” approach to measure its impact on the lives of the ultra-poor. They found that the approach had long-lasting economic and self-employment impacts and that the long-run benefits, measured in terms of household expenditures, outweighed their up-front costs. Here we summarize the India site, which had similar effects as the other successful sites.

Policy Issue:

More than one fifth of the world’s population lives on less than US$1.25 per day. Many of these families depend on insecure and fragile livelihoods, including casual farm and domestic labor. Their income is frequently irregular or seasonal, putting laborers and their families at risk of hunger. Self-employment is often the only viable alternative to menial labor for the ultra-poor, yet many lack the necessary cash or skills to start a business that could earn more than casual labor.

In the past, many programs that have provided ultra-poor households with either credit or training to alleviate these constraints have not been successful at raising household income levels on average.  However, in recent years, several international and local nongovernmental organizations have renewed their support for programs that foster a transition to more secure livelihoods. Combining complementary approaches—the transfer of a productive asset, training, consumption support, and coaching— into one comprehensive program may help spur a sustainable transition to self-employment. To better understand the effect of these programs on the lives of the ultra-poor, researchers coordinated to conduct six randomized evaluations in Ethiopia,  GhanaHonduras, India, Pakistan, and Peru.

Context of the Evaluation:

In India, researchers partnered with Bandhan, a local microfinance institution. The study focused on households with an able-bodied woman that were not associated with any microfinance institution and received below a certain threshold of government aid. Households commonly had little land, no non-land productive assets, and relied on informal labor for income. Bandhan further narrowed eligibility by conducting a participatory rural appraisal to identify the poorest community members. Within the sample, the median total per capita consumption was 2014 PPP US$1.15 per day, with 73 percent of households consuming less than US$1.25 per day. Around 90 percent of households reported that some adults sometimes had to skip meals, and 40 percent reported the same for children.

Details of the Intervention:

In partnership with Bandhan, researchers conducted a randomized evaluation to test the impact of an 18-month comprehensive livelihoods program (“the Graduation approach”) on the lives of the ultra-poor. This approach was first developed by Bangladeshi NGO BRAC in 2002 and has since been replicated in several countries. From a sample of 978households, researchers randomly assigned 512 to the treatment group and the remaining 466 to the comparison group, which would not receive the program. Of those offered the Graduation program, around half of all households accepted.

The intervention consisted of six complementary components, each designed to address specific constraints facing ultra-poor households:

1. Productive asset transfer: One-time transfer of a productive asset valued at Rs. 4,500 (2014 PPP US$437). A majority of participants chose goats, while 30 percent selected cows and 11 percent opted for nonfarm micro-enterprise inventory.

2. Technical skills training: Training on running a business and managing their chosen livelihood. For example, households who selected livestock were taught how to rear the livestock, including vaccinations, feed and treatment of diseases.

3. Consumption support: Households received weekly cash transfers of Rs. 90 (2014 PPP US$9) for 13 to 40 weeks, depending on the productive asset chosen

4. Savings: Households were required to save Rs. 10 (2014 PPP US$1) per week

5. Home visits: Weekly home visits by Bandhan staff to provide accountability, coaching, and encouragement.

6. Health: During weekly home visits, Bandhan staff discussed health matters.

The 18-month Graduation program was rolled out in 2007 and 2008 and ended between 2008 and 2010. Researchers surveyed participants immediately after the program concluded and one year later.

Results and Policy Lessons:

Across all six countries, researchers found that the program caused broad and lasting economic impacts. Treatment group households consumed more, had more assets, and increased savings. The program also increased basic entrepreneurial activities, which enabled the poor to work more evenly across the year. While psychosocial well-being improved, these noneconomic impacts sometimes faded over time. In five of the six studies, long-run benefits outweighed their up-front costs. In India, specifically, researchers found similar effects:

Economic impacts: One year after the Graduation program ended, average total monthly consumption among treatment households was 2014 PPP US$63.68, a 11 percent increase over households in the comparison group. Food spending was also higher than in the comparison group, and more households reported having enough food every day. Ownership of household and productive assets also increased significantly among Graduation program participants. For treatment group households, measures of financial inclusion also increased. Researchers were unable to collect savings data. However, significantly more Graduation program households reported borrowing from formal sources than those in the comparison group, with no change in borrowing rates from informal sources.

Self-employment: One year after the Graduation program ended, treatment group households reported spending 25 minutes more per day on productive activities than the average 3 hours 45 minutes among comparison group households. Graduation households also experienced a nearly four-fold increase in livestock revenue relative to comparison group households.

Psychosocial wellbeing: The Graduation program did not affect measures of physical or mental health. There were no changes in illness, happiness, stress, or likelihood of feeling anxious or worried in the last year.

Political Involvement: There is some evidence that participation in the Graduation program increased political involvement. One year after the program ended, 55 percent of treatment group households reported voting in the last election (compared to 48 percent of the comparison group) and 49 percent reported voicing concerns with their village leaders in the past year (compared to 44 percent in the comparison group).

Cost-benefit analysis: Compared to less comprehensive interventions, the Graduation program had relatively high up-front costs. Researchers calculated total implementation and program costs to be US$330 per household (2014 PPP US$ 1,455). However, estimated benefits from consumption and asset growth amount to 2014 PPP US$6,298 per household, representing an overall 433 percent return.

Slum Housing Upgrading In El Salvador, Mexico and Uruguay

Adequate housing is thought to provide a number of benefits, including greater satisfaction with one’s quality of life, better mental and physical health, protection against extreme weather, and improved safety and defense against crime. Researchers measured the impact of improving the quality of slum housing on household wellbeing in El Salvador, Mexico, and Uruguay, with IPA implementing the evaluation in Mexico. Residents were selected to receive housing upgrades by lottery. Results showed that slum upgrading significantly improved satisfaction with quality of life. In two countries positive and significant effects were detected in child health. In El Salvador, significant and positive effects were observed in the perception of safety. Finally, no effects were detected in labor market variables and in the accumulation of durable goods.

Policy Issue:
The United Nations estimates that nearly one billion people, primarily in the developing world, live in urban slums and lack proper housing.  Slum houses are typically made of waste materials such as cardboard, tin, and plastic, have dirt floors, and lack connections to basic services such as water and sewer systems. Adequate housing is thought to provide a number of benefits, including better mental and physical health, protection against extreme weather, and improved safety and defense against crime. Improved safety and security may, in turn, allow households to accumulate assets and free up time for productive activities that would otherwise be devoted to protecting these assets. Better housing can also affect individuals’ sense of dignity and satisfaction with their quality of life, which may complement improvements in other dimensions. One way to address the challenge of inadequate housing is to upgrade slum dwellings with inexpensive yet durable materials such as concrete floors or tin roofs. Despite the widely held belief that housing has an important role to play in improving health and welfare, there is little rigorous evidence about how housing improvement programs can affect the welfare of participants.
 
Context of the Evaluation:
This study as a whole measures the effect of a slum housing improvement program across three Latin American countries: El Salvador, Mexico, and Uruguay. Researchers partnered with IPA to carry out the evaluation in Mexico. 
 
Slums in Latin America are typically found in dangerous geographic locations, such as on cliffs or slopes, and lack access to basic services such as water, electricity, and sanitation. Residents are also exposed to significant levels of soil and water contamination and overcrowding.
 
Using baseline and national survey data, researchers identified several key differences between the slum populations and poor populations not living in slums. In particular, slum populations were worse off in terms of asset possession than other poor populations, which tend to have better access to basic services and higher quality housing. These differences were most pronounced in El Salvador, the poorest country in the sample.
 
In Uruguay and Mexico, on the other hand, poor slum dwellers tended to have significantly higher incomes than poor non-slum dwellers. This could be because slums tend to form around large urban centers where there are more employment opportunities, and people who choose to live in slums may be more willing to accept worse living conditions in exchange for better access to the labor market. 
 
 
Details of the Intervention:                                
Researchers partnered with TECHO to evaluate the impact of upgrading housing infrastructure in urban slums in El Salvador, Mexico, and Uruguay, and IPA implemented the evalution in Mexico. TECHO is a youth-led non-governmental organization that works across nineteen Latin American countries to provide basic, pre-made houses to people living in slums. TECHO targets families living in sub-standard housing facilities and provides them with basic housing structures as a part of a package of social services designed to help lift households out of extreme poverty.
 
The TECHO housing units are one-room houses made with insulated pinewood and tin roofs. Units are portable, constructed with simple tools, and can be set up by groups of 4-8 volunteers. Although TECHO units are a major improvement over the recipients’ previous housing, they still lack plumbing, sewage, and gas connections. The cost of each housing unit is approximately US$1,000 and beneficiary households are expected to contribute ten percent of the total cost. In El Salvador, this is roughly equivalent to 3 months of earnings, while in Mexico and Uruguay it is closer to 1.4 months of earnings.
 
Informal settlements were eligible to receive TECHO housing if they had ten or more families living on public or private land and lacked access to one or more basic services such as electricity, water, or sewage. Within an eligible settlement, the poorest households were eligible to receive a housing upgrade. Due to budget and personnel constraints, TECHO conducted lotteries within eligible settlements to select which households would receive houses. From a sample of 2373 eligible households across all three countries, 1356 were randomly selected to receive housing upgrades and the remaining 1017 served as the comparison group. 
 
Researchers conducted follow-up surveys between 17 and 27 months after households received the improved house and collected data on self-reported satisfaction, safety, and health as well as labor market outcomes and possession of durable goods. 
 
Results and Policy Lessons:
Impacts on quality of life: Families that received housing upgrades from TECHO were more satisfied with their homes and quality of life. Satisfaction increased by 15 percentage points across all three countries, a 29 percent increase over satisfaction ratings in the comparison group. Households in El Salvador experienced the largest gains in satisfaction with their homes, approximately 21 percentage points (41 percent), partially because self-reported levels of satisfaction were generally lower than in the other countries at baseline. 
 
The program had no effect on households’ investments in their homes. Families did not make further investments in their homes in response to the TECHO improvements, and there were no significant improvements in access to water, electricity, or sanitation. 
 
Impacts on security and safety: Households in El Salvador who received housing upgrade reported substantial improvements in their feeling of security. Recipient households were 18 percentage points more likely to feel safe inside their houses, 16 percentage points more likely to feel safe leaving their homes alone, and 14 percentage points more likely to feel safe leaving children alone at home. The program did not have any significant impact on perceptions of safety in Mexico or Uruguay. 
 
Impacts on children’s health: In El Salvador and Mexico, child health improved as a result of the TECHO program. Households reported a four percentage point (27 percent) decrease in the incidence of diarrhea from a base of 15 percent. There were no statistically significant improvements in child health in Uruguay, perhaps because the experiment took place in slums that were more urbanized with better access to basic services. 
 
Researchers concluded that providing better housing in urban slums was fairly inexpensive and substantially increased life satisfaction across multiple contexts. They suggest that upgrading homes in existing slums should be considered as an option in addition to relocating residents to new houses farther away from urban centers given residents’ potential preference for proximity to labor markets.

The Impact of Cognitive Behavior Therapy and Cash Transfers on High-Risk Young Men in Liberia

In many fragile states, poor young men with limited economic opportunities drive high rates of crime and violence, and are easily mobilized into destructive activities such as rioting and rebellion. A large body of largely observational evidence in psychology research in the United States demonstrates that cognitive behavior therapy (CBT), a therapeutic approach to improving a wide range of harmful beliefs and behaviors, is an effective way to reduce violence and criminality among children and adolescents. To understand the potential effectiveness of CBT among adults in fragile states, researchers evaluated the impact of a short-term CBT program and the distribution of unconditional cash transfers on the behavior of high-risk young men in Liberia. Results demonstrate that CBT reduced criminal behavior and improved self-control and self-image among participants; these results were greater for participants who received both CBT and cash grants, but cash grants alone had no impact.

Find a four-page policy brief here, and the full paper here.
 

Policy Issue:

In many fragile states, poor young men with limited economic opportunities drive high rates of crime and violence, and are easily mobilized into destructive activities such as rioting and rebellion. For weak governments, these young men often pose one of the greatest risks to stability and economic growth. A large body of largely observational psychology research and experience in the United States suggests that cognitive behavior therapy (CBT), a therapeutic approach to improving a wide range of harmful beliefs and behaviors, is likely an effective way to reduce violence and criminality among children and adolescents. However, less evidence exists on the impacts of CBT on adults, or in other country contexts. To understand the potential effectiveness of CBT among adults in fragile states, researchers evaluated the impact of a short-term CBT program and the distribution of unconditional cash transfers on the behavior of high-risk young men in Liberia.

Context of the Evaluation:

In the past three decades, Liberia suffered two civil wars that killed ten percent of the population, displaced a majority, and recruited tens of thousands of people into combat. Though the last armed conflict ended in 2003, the country still remains very poor; most young men have limited employment, and so some turn to criminal activity. The men who were targeted and participated in this study were considered at highest risk for this type of criminal or violent behavior. The sample enrolled in the CBT program had an average of eight years of schooling and earned about US$68 in the past month working 46 hours per week (mainly in low skilled labor and illicit work). Thirty-eight percent were former members of an armed group, and 24 percent were homeless.

Details of the Intervention: 

Researchers conducted a randomized evaluation to measure the impact of the Sustainable Transformation of Youth in Liberia program (STYL), a short-term CBT program targeting high-risk young men to reduce destructive behaviors, such as criminality and substance abuse. STYL was developed organically over the past ten years by the Network for Empowerment and Progressive Initiatives, a local organization led by reformed combatants and other formerly high risk youth. Among a random sample of 999 young men living in Monrovia, half were randomly enrolled in STYL.

The eight-week STYL program combined frequent group therapy sessions with one-on-one counseling, conducted by program facilitators who were graduates of a previous STYL program. Through a combination of discussion, reflection, and practical homework assignments, the program aimed to improve participants’ self-image and self-control. Participants were given lunch during session days to compensate for time spent in session.

Researchers also examined the impact of unconditional cash transfers on the young men’s behaviors and beliefs. Shortly after the therapy program ended, another random half of the 999 young men received one-time unconditional cash grants of US$200. Thus, one group of the men received cash, a second group received therapy, a third group received both cash and therapy, and a fourth comparison group received nothing.

To measure both short- and longer-term impacts on participants’ beliefs, behaviors, and economic outcomes, researchers conducted follow-up surveys two and five weeks, and twelve and thirteen months after the cash grants were distributed. Since most data were self-reported, they validated the behavior of a subsample with intensive qualitative observation.

Results and Policy Lessons:

STYL participation had large and significant impacts on participants’ behaviors and beliefs, both in the short and long term. This effect was even greater for participants who received both the therapy and the cash grant. The cash grant alone had no behavioral effect on participants. Neither the therapy nor the cash grant impacted long-term economic outcomes.

Behaviors and beliefs

Receiving therapy with or without the cash reduced the likelihood of aggressive and criminal behavior among participants. Those who received therapy were 8.6 percentage points (55 percent) less likely to carry a weapon and 8.0 percentage points (47 percent) less likely to sell drugs in the short term, relative to the comparison group. These reductions persisted over the long term, and were even greater for individuals who received both the cash and therapy. In the long term, those who received both therapy and cash reported conducting 0.72  (38 percent) fewer thefts in the past two weeks.

Receiving therapy with or without the cash also improved some measures of self-control and self-image. On an index assessing impulsive behavior, therapy recipients reported a long-term reduction in impulsivity of 0.17 standard deviations and those who received therapy and cash reported a reduction of 0.21 standard deviations. Those who received both therapy and cash also reported a long-run improvement on an index measuring self-esteem of 0.19 standard deviations. These are large changes by the standards of most therapeutic interventions.

Economic outcomes

Receiving therapy had no impact on the usage of the cash grant. Regardless of receiving therapy, cash recipients reported using roughly a quarter of the grant on consumption and rent, a quarter on business investments, and about one-fifth on savings and debt payments. Only 4 percent of the grant was allocated to drugs, alcohol, and other temptation goods.

The cash grants increased recipients’ short-term incomes and business investments, relative to those who did not receive cash grants, but these effects did not persist into the long run. In the short term, cash recipients invested approximately US$57 more on average in their businesses, and weekly business profits increased by US$4.40, or 30 percent. Interviews with participants suggested that at least part of the reason they were not able to sustain these profits in the long run was due to insecure property rights. At each survey round, about 70 percent of the men reported a robbery or stolen belongings in the past month.

These results demonstrate that cognitive behavior therapy, combined with unconditional cash transfers, can be an effective method of reducing criminality, violence, and drug use. The program was fairly low cost, at US$530 per participant, suggesting that this program could be implemented on a larger scale.

Media coverage of this project:

Chris Blattman writes on The Washington Post Monkey Cage Blog.

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.

Investigating Rural Labor Markets Among the Ultra-Poor in Northern Ghana

Few subsistence farmers engage in paid labor, even when pursuing these opportunities would enable them to earn more and protect against risk. A variety of factors may influence this trend, including poor nutrition, the complexity of the work, and lack of access to financial services. Researchers designed an employment program in northern Ghana and evaluated participants’ willingness to engage in paid labor and carry out complex tasks on the job.

Policy Issue:

Self-employed farmers in sub-Saharan Africa may earn more by engaging in wage labor, but few pursue off-farm opportunities, forgoing higher and more predictable incomes. There are a number of possible explanations for this trend, including lack of information about job opportunities or high transportation costs to get to work sites. The choice to engage in wage labor may also be affected by the wage level, the complexity of the work, or an individual’s nutrition status. For instance, farmers may only be willing to pursue wage labor above a certain wage threshold, or they may find the tasks too complex or onerous to complete.  Poor nutrition could also make workers less productive and, thereby, more costly to hire. Rigorous research is needed to disentangle the various mechanisms that affect individuals’ choices to engage in wage labor.

Context of the Evaluation:

Subsistence agriculture is the main economic activity for the vast majority of rural households in Ghana. Researchers introduced an employment program in communities in northern Ghana that were already participating in an ultra-poor graduation program. The two-year Graduation from Ultra Poverty (GUP) program, originally developed and evaluated in Bangladesh, offers a comprehensive package of services (productive assets, consumption support, financial literacy training, and healthcare) to households living in extreme poverty.

A random subset of participants in GUP was assigned to a voluntary savings program called Savings Out of Ultra Poverty (SOUP), in which clients had the opportunity to earn a 50 percent match on their savings.

Researchers partnered with Presbyterian Agricultural Services (PAS) and Innovations for Poverty Action (IPA) to implement GUP and SOUP in 155 communities in northern Ghana.

Details of the Intervention:

Researchers introduced an employment program in communities in northern Ghana that were already receiving GUP and SOUP or part of the comparison group for the GUP evaluation.  Half of all GUP, SOUP, and comparison villages were randomly selected to participate in an 11-month employment program that offered wages for the production of cloth bags.  This amounted to 120 villages: 42 comparison villages, 39 GUP villages, and 39 SOUP villages (1,098 households total).

Researchers randomly varied the complexity of the bag design and wage per bag to understand the impact of these factors on individuals’ decisions to engage in paid labor and whether willingness to engage in complex tasks depended on the wage level. Of the 120 villages assigned to the bags program, 60 were assigned to produce a simple bag and 60 were assigned to produce a complex bag, based on the difficulty of the stitching required. Participants were randomly assigned to receive either a high wage of GHC 0.70 (approximately US$0.39) or a low wage of GHC 0.30 (approximately US$0.16), and the wage assignment switched every four weeks.

Communities received all sewing materials and a four-day training on how to produce the bags prior to the start of the employment program. Program facilitators carried out regular quality checks to assess how well the simple and complex bags produced met the pre-determined quality standards. Within each wage category, participants could earn an additional GHC 0.10 more per bag for producing a high quality bag or lose GHC 0.10 per bag for producing a low quality bag.

Results and Policy Lessons:

Results forthcoming.

 

Ultra Poor Graduation Pilot in Yemen

Can an intensive package of support lift the ultra poor out of extreme poverty to a more stable state? Graduation programs provide ultra-poor beneficiaries with a holistic set of services including: consumption support, new livelihoods (such as chickens or goats) provided as an asset transfer along with training on management of the assets, access to savings, and coaching visits over a 24-month period. IPA is conducting randomized evaluations of CGAP and Ford Foundation-sponsored graduation pilots in seven countries: IndiaPakistanHondurasPeruEthiopiaYemen, and Ghana.

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 Graduation Approach, developed by BRAC in Bangladesh, recognizes that the ultra poor face an interrelated set of challenges: lack of skills, assets, and confidence, along with nutritional gaps and health shocks. The graduation approach incorporates a comprehensive package of services designed to ensure that households have the "breathing space" to focus on building new livelihoods, along with a secure place to grow their assets.

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

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