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. 2016 Nov;131(4):1973-2042.
doi: 10.1093/qje/qjw025. Epub 2016 Jul 19.

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

Johannes Haushofer  1 , Jeremy Shapiro  1
Affiliations

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

Johannes Haushofer et al. Q J Econ. 2016 Nov.

Abstract

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

Keywords: C93; D12; D13; D14; O12.

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Figures

FIGURE I
FIGURE I
Timeline of Study Timeline and treatment arms. Numbers with slashes designate baseline/endline number of households in each treatment arm. Male versus female recipient was randomized only for households with cohabitating couples. Large transfers were administered by making additional transfers to households that had previously been assigned to treatment. The lump-sum versus monthly comparison is restricted to small transfer recipient households.
See this image and copyright information in PMC

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