How large economic stimuli generate individual and aggregate responses is a central question in economics, but has not been studied experimentally. We provided one-time cash transfers of about USD 1000 to over 10,500 poor households across 653 randomized villages in rural Kenya. The implied fiscal shock was over 15 percent of local GDP. We find large impacts on consumption and assets for recipients. Importantly, we document large positive spillovers on non-recipient households and firms, and minimal price inflation. We estimate a local fiscal multiplier of 2.7. We interpret welfare implications through the lens of a simple household optimization framework.
Helping the ultra-poor develop sustainable livelihoods is a global priority, but policymakers, practitioners, and funders are faced with competing ideas about the best way to reduce extreme poverty. Innovations for Poverty Action conducted a randomized evaluation to test the impacts of diverse components and variants of the Village Enterprise microenterprise program, an integrated poverty alleviation intervention that provides poor households with a combination of cash transfers, mentorship, business training, and support with the formation of savings groups, over a one-year period.
- Village Enterprise’s microenterprise development program led to increased consumption, assets, and income, as well as improvements in nutrition and subjective well-being.
- Cost-effectiveness appears high: researchers estimate a full cost recovery within three to four years.
- A cost-equivalent cash transfer appeared to have less promising medium-term impacts on poverty reduction and subjective well-being than the microenterprise program, though estimates are more ambiguous.
- Adding a light-touch behavior change component to the cash transfer changed the investment patterns of cash transfer recipients and improved subjective well-being somewhat, but cannot be characterized as a substitute for the much more heavy-touch training and mentorship interventions of the microenterprise program.
- Overall, the results suggest that training and mentorship components of integrated poverty alleviation programs are sensible and cannot simply be removed (or substituted for cash transfers). But as they are complex, more research is needed on the issue of scaling them while maintaining their quality.
Améliorer les opportunités d’emploi productif et inclusif est un enjeu essentiel pour une croissance durable et pour une réduction de la pauvreté en Côte d’Ivoire. La Côte d’Ivoire fait face à un défi majeur de qualité de l’emploi. L’emploi est fortement concentré dans des activités indépendantes agricoles et non-agricoles. En moyenne, l’emploi indépendant a une productivité et des revenus relativement faibles, ce qui mène à un sous-emploi important en fonction des revenus. Dans ce contexte, une stratégie productive et inclusive de promotion de l’emploi devrait à la fois se concentrer sur la création de nouveaux emplois, considérer l’amélioration de la qualité des emplois existants et l’inclusion des pauvres, des femmes et des population rurales dans des emplois productifs. Améliorer les opportunités d’emploi productif pour les groupes de population vulnérables est un enjeu essentiel pour une croissance durable et pour une réduction de la pauvreté en Côte d’Ivoire.
La disponibilité de nouvelles informations en matière d’emploi a encouragé la formation d’une initiative multi-acteurs pour opérationnaliser un nouvel agenda de l’emploi pour la Côte d’Ivoire. La réalisation des enquêtes emploi et les analyses secondaires qui en ont découlé ont permis de faire un diagnostic détaillé de la situation de l’emploi en Côte d’Ivoire. Ce diagnostic a été complété par plusieurs évaluations d’impact de programmes d’emploi qui ont permis d’améliorer les connaissances sur l’efficacité de différents types d’intervention. Par ailleurs, de nouvelles approches ciblant à la fois les individus en âge de travailler et les entreprises créatrices d’emplois, sont actuellement pilotées au niveau international dans l’objectif de maximiser les résultats sur l’emploi. Sur la base de ces nouvelles informations, la perspective d’une opérationnalisation d’un nouvel agenda de l’emploi pour la Côte d’Ivoire s’est ouverte. Cette initiative a été conjointement portée par la Direction Générale de l’Emploi et le Bureau de Coordination des Programmes d’Emploi et appuyée par la Banque mondiale, l’Agence française de développement, Innovations for Poverty Action et l’Abdul Latif Jameel Poverty Action Lab.
Recent research suggests giving cash directly to the poor can have a range of benefits for recipients in the first few years, including increased consumption, assets, and food security, but little evidence exists on the long-term effects of cash transfers, particularly as a way to spur entrepreneurship and increase earnings. To shed light on this question, researchers conducted a randomized evaluation in Uganda of a government self-employment program that provided cash grants of about $400 per person to groups of young adults to start a skilled trade. An IPA research team followed up after two, four, and nine years—providing some of the longest-term rigorous evidence on how start-up cash grants impact measures of poverty.
» Four years after grants were distributed, recipients were more likely to be practicing a skilled trade and earning 38 percent more than their peers who hadn’t received grants. The boost in earnings seemed to be driven by recipients’ work in skilled trades.
» Nine years after the cash grants were disbursed, most of the business and earning gains had dissipated, but grant recipients still had more household assets and were more likely to be practicing a skilled trade.
» The fade out of business and earnings effects was driven by changes in the comparison group: those who hadn’t received the grants had started working, and earning, a lot more—in fact, they had caught up to the grant recipients in hours worked and income.
» The grant had some positive impacts on health outcomes, but only for the children of women who had received the grant: children of grant-recipient mothers displayed better physical skills such has walking and talking, relative to male-recipients and to the comparison group.
» In sum, start-up grants served the purpose of providing better jobs and businesses—but they did not offer sustained gains in earnings as earlier ndings suggested.
Innovations for Poverty Action (IPA) is a research and policy non-profit that discovers and promotes effective solutions to global poverty problems. IPA brings together researchers and decision-makers to design, rigorously evaluate, and refine these solutions and their applications, ensuring that the evidence created is used to improve the lives of the world’s poor. Since our founding in 2002, IPA has worked with over 575 leading academics to conduct over 650 evaluations in 51 countries. Future growth will be concentrated in focus countries, such as Myanmar, where we have local and international staff, established relationships with government, NGOs, and the private sector, and deep knowledge of local issues.
Over the past two decades, sports programs have proliferated as a mode of engaging youth in development projects. Thousands of organizations, millions of participants, and hundreds of millions of dollars are invested in sports-based development programs each year. The underlying belief that sports promote socioemotional skills, improve psychological well-being, and foster traits that boost labor force productivity has provided motivation to expand funding and offerings of sport for development (SFD) programs. We partnered with an international NGO to randomly assign 1200 young adults to a sports and life skills development program. While we do not see evidence of improved psychosocial outcomes or resilience, we do find evidence that the program caused a 0.12 standard deviation increase in labor force participation. Secondary analysis suggests that the effects are strongest among those likely to be most disadvantaged in the labor market.
In Ghana, we have continued our global tradition of rigorous, applicable research by building foundational research capacity and conducting evaluations in areas of pressing national concern. Examples of our work in this brief offer promising insights into everyday issues that affect the lives of the Ghanaian poor.
Over 700 million people live on less than US$1.90 per day.1 Many of these families depend on insecure and fragile livelihoods. Globally nearly half of all deaths in children under 5 are attributable to undernutrition, translating into the loss of about 3 million young lives a year.2 Recent research has shown that holistic livelihoods programs, such as the Graduation Approach can have a wide range of benefits for these poor families, from increasing household consumption and income to improving food security and mental health. The Graduation model provides families with a range of services, including income-generating assets, training, access to savings accounts, consumption support, and coaching visits, and variations of the model have been successfully replicated in several contexts. The aim of this research in Burkina Faso is to rigorously evaluate whether an adapted Graduation program design, which focuses on strengthening the household’s ability to cope with crises, leads to improvements in child nutrition and household food security. The baseline survey found the program has effectively targeted nutritionally vulnerable households. The randomized evaluation is ongoing.
Around the world, 152 million children are engaged in child labor. Because poverty is thought to be the root cause of child labor, policymakers have aimed to reduce child labor by improving the economic welfare of poor households where children are engaged in child labor. In the Philippines, researchers partnered with the Philippine Department of Labor and Employment (DOLE) to conduct a randomized evaluation of the impact of a program that provided a one-time productive asset transfer of PHP 10,000 (equivalent to US$518) on economic well-being and child labor outcomes.
Approximately 15 months after the program started:
- The assets increased household business activity, both fostering new activities and helping older business activities persist.
- The program increased food security and improved some measures of child welfare, including children’s life satisfaction.
- The program had a positive rate of return on family-firm generated income.
- However, the program also led to an increase in child employment for children who had not worked before.
- The increase in child employment appears to be driven by the increase in work opportunities brought on by the family businesses.
- The results support productive asset livelihoods promotion as a poverty alleviation strategy in poor families with child labor present, but cast doubt on the approach as a way to eradicate child labor, at least in this context.
We evaluate an intervention to raise young women’s economic empowerment in Sierra Leone, where women frequently experience sexual violence and face multiple economic disadvantages. The intervention provides them with a protective space (a club) where they can …nd support, receive information on health/reproductive issues and vocational training. Unexpectedly, the post-baseline period coincided with the 2014 Ebola outbreak. Our analysis leverages quasi-random across-village variation in the severity of Ebola-related disruption, and random assignment of villages to the intervention to document the impact of the Ebola outbreak on the economic lives of 4 700 women tracked over the crisis, and any ameliorating role played by the intervention. In highly disrupted control villages, the crisis leads younger girls to spend signi…cantly more time with men, out-of-wedlock pregnancies rise, and as a result, they experience a persistent 16pp drop in school enrolment post-crisis. These adverse e¤ects are almost entirely reversed in treated villages because the intervention enables young girls to allocate time away from men, preventing out-of-wedlock pregnancies and enabling them to re-enrol in school post-crisis. In treated villages, the unavailability of young women leads some older girls to use transactional sex as a coping strategy. The intervention causes them to increase contraceptive use so this does not translate into higher fertility. Our analysis pinpoints the mechanisms through which the severity of the aggregate shock impacts the economic lives of young women, and shows how interventions in times of crisis can interlink outcomes across younger and older cohorts. J
How do standard development programs compare to just giving people cash? In Rwanda, researchers conducted a randomized evaluation to shed light on this question. Villages were randomly assigned to one of four groups: they received either a USAID-funded, integrated WASH and nutrition program (with savings and asset transfer components), unconditional cash grants of equal cost to the donor, a larger cash transfer, or no program at the time of study. The transfers were funded by USAID and Google.org.
The evaluation measured impacts on five main health and economic outcomes: household dietary diversity, maternal and child anemia, child growth (height-for-age, weight-for-age, and mid-upper arm circumference), household wealth, and household consumption, as well as other secondary outcomes, such as savings.
After approximately one year:
» The integrated nutrition and WASH program had a positive impact on savings, a secondary outcome, among the eligible population, but did not impact any primary outcomes (household dietary diversity, maternal or child anemia, child growth, household consumption, or wealth) within the period of the study.
» An equivalent amount of cash (a cost to USAID of $142 per household) allowed households to pay down debt and boosted productive and consumption assets, but did not impact child health outcomes.
» A much larger cash transfer—of more than $500 per household—had a wide range of benefits: it not only increased consumption, savings, assets, and house values,but improved household dietary diversity and height-for-age, and decreased child mortality.
» The results suggest that, over the time period of the study, targeted programs focused on changing specific outcomes may be able to do so at lower cost than cash, but that large investments of cash can more rapidly affect some leading indicators of malnutrition.
» The results also suggest that large cash transfers impact not only the economic measures of consumption and wealth, but also dietary diversity, height-for-age, and child mortality, while small transfers appear to have more limited benefits.
In 2008, Uganda granted hundreds of small groups $400/person to help members start individual skilled trades. Four years on, an experimental evaluation found grants raised earnings by 38% (Blattman, Fiala, Martinez 2014). We return after 9 years to find these start-up grants acted more as a kick-start than a lift out of poverty. Grantees' investment leveled off; controls eventually increased their incomes through business and casual labor; and so both groups converged in employment, earnings, and consumption. Grants had lasting impacts on assets, skilled work, and possibly child health, but had little effect on mortality, fertility, health or education.
We present the results of a study designed to ‘benchmark’ a major USAID-funded child malnutrition program against what would have occurred if the cost of the program had simply been disbursed directly to beneficiaries to spend as they see fit. Using a three-armed trial from 248 villages in Rwanda, the study measures impacts on households containing poor or underweight children, or pregnant or lactating women, as well as the broader population of study villages. We find that the bundled health program delivers benefits in an outcome directly targeted by specific sub-components of the intervention (savings), but does not improve household dietary diversity, child anthropometrics, or anemia within the year of the study. A cost-equivalent cash transfer boosts productive asset investment and allows households to pay down debt. The bundled program is significantly better in cost-equivalent terms at generating savings and worse for debt reduction, while cost-equivalent cash drives more asset investment. A much larger cash transfer of more than $500 per household improves a wide range of consumption measures including dietary diversity, as well as savings, assets, and housing values. Only the large cash transfer shows evidence of moving child outcomes, with significant but modest improvements in child height-for-age, weight-for-age, and mid upper-arm circumference (about 0.1 SD). The results indicate that programs targeted towards driving specific outcomes can do so at lower cost than cash, but large cash transfers drive substantial benefits across a wide range of impacts, including many of those targeted by the more tailored program.
Un equipo de investigadores de Innovations for Poverty Action, en colaboración con el Gobierno Colombiano, desarrolló una auditoría aleatoria de dos de los programas sociales más grandes del país—Sistema de Identificación de Potenciales Beneficiarios de Programas Sociales (Sisbén) y Más Familias en Acción (MFA)—para medir cómo el estatus social de los ciudadanos y los factores políticos locales afectan la eficiencia de los servidores municipales en el procesamiento y atención de las solicitudes ciudadanas.
- La tasa de respuesta de las llamadas a las alcaldías municipales del territorio nacional y las alcaldías locales en Bogotá fue baja: cerca del 65% de los solicitantes recibieron una respuesta en hasta seis intentos.
- Un número importante de alcaldías (148/618 o 23%) son inaccesibles por teléfono durante horas de servicio al ciudadano.
- Era menos probable que las llamadas fueran respondidas en horas de la tarde (después de almuerzo) que, en horas de la mañana, proporcionando una leve evidencia de ausentismo. » Dentro de las llamadas respondidas, menos del 50% de los solicitantes recibieron información correcta sobre Más Familias en Acción o Sisbén.
- El equipo investigador encontró evidencia moderada de discriminación según el acento regional, la clase socioeconómica y el estado migratorio cuando los solicitantes preguntaban cómo acceder a beneficios de MFA y Sisbén.