10 Suggested Readings on Cash Transfers

Over the course of the year, I reviewed, synthesized, and shared 631 resources on social protection. Because of the scale and quality of research, selecting the most salient or interesting materials is a daunting task fraught with dilemmas and tough choices. But in the spirit of providing an indicative compilation, let me share 10 suggested readings for the holidays. The selection – which spans contexts and themes, but generally revolves around cash transfers – reflects both positive and more sobering results . Papers are presented chronologically by the month they were reviewed and are accompanied by a short motivation for their inclusion. I hope you enjoy the collection!

 

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1. Morais et al. for documenting how large coverage of cash transfers can save lives

The article quantified the effects of Bolsa conditional cash transfers on HIV outcomes in Brazil. By tracking municipalities for 15 years (2004-18), the authors found that, compared to municipalities with low cash coverage (less than 30% of target population), areas with high Bolsa coverage (over 70% of target population) reduced AIDS incidence between 4.4%-13.1%. As a result, AIDS-related hospitalization declined by 16.5%-22.6% and AIDS-induced mortality dropped by 12.6%-14.8%.

 

2. Troller-Renfree et al. for revealing the positive effects on infants’ brains when mothers receive more generous cash transfers

The study documented how monthly unconditional cash transfers improve early childhood brain activity in the US. A thousand low-income mothers in four cities are currently receiving monthly unconditional cash transfers for the first 52 months of the children’s lives, with the first payment made upon the baby’s birth. Mothers were randomly assigned to either a “high-cash gift group” (receiving $333/month, or a boost of 20% on mothers’ income) or in a “low-cash gift group” ($20/month). At one year of age, Troller-Renfree et al reported that children with mothers in the high-cash arm showed greater brain activity, as measured by electroencephalography power (effect sizes = 0.17 to 0.26), compared with infants in the low-cash group.

 

3. Lavers for shedding new light on how political forces can determine both “if” and “how” cash transfers can spread across Africa and Asia

The edited volume by Lavers examines the politics of distributing social transfers in six countries: Ethiopia (by Lavers), Rwanda (Williams et al), Ghana (Ampratwum), Kenya (Porisky), Bangladesh (Hossain) and Nepal (Pradhan et al). Discussion of these case studies is preceded by a crisp overview on key issues on the politics of cash distribution. Key insight? “[S]tate capacity alone is insufficient. Vitally, national, and local political dynamics shape the ways in which this state capacity is deployed in program implementation.”

 

4. Della Guardia et al. for underscoring the benefits as well as significant social tensions that poverty targeting can generate in contexts where everyone is similarly vulnerable

The paper assesses the performance of proxy means testing in Chad as part of a cash transfer program covering 40% of the population in seven villages of the Logone region (where 98% of their inhabitants lived on less than $1.9/day). The programs generated a range of benefits, but its targeting sparked deep animosity, resentment, and divisions within communities. This led to discriminatory practices toward recipients by non-beneficiaries. Examples include non-recipients buying items from beneficiaries on credit and refusing to pay them back; avoiding purchasing from program participants; or charging participants higher market prices.

 

5. Immervoll et al. for showing that in some higher-income settings, the difference in social protection coverage between workers in ‘standard’ and ‘non-standard’ contracts is narrower than we thought

The paper investigates the extent to which workers in “non-standard” employment (self-employed, part-time and unstable dependent employment) are covered by social protection in the OCED: for eight out of 16 countries (e.g., Germany and UK), the authors found that, contrary to conventional wisdom, there is only a limited gap between coverage provisions accorded to non-standard versus standard workers (or those on longer-term wage employment). Conversely, differences were more pronounced in other countries, including non-standard workers being 50-60% less likely to be covered during periods of unemployment than their standard peers (e.g., Korea and Italy). Similarly, some countries (e.g., France and Belgium) display significant differences across workers in terms of benefits adequacy.

 

6. Jaroszewicz et al. for illustrating that a program that works well “objectively” may not imply that recipients “feel” better psychologically

The study compared the effects of two transfer amounts among over 5,200 low-income people in the United States. Results show that cash improved various objective outcomes in the short term. However, it also reported significantly worse outcomes on some psychological measures. In other words, “… while the cash did not actually produce worse outcomes in some objective sense, in some situations it made recipients feel worse.” Why? Because cash shifted how beneficiaries thought about their needs after they received the transfers, and the relatively limited money “… may have made their needs—and the gap between their resources and needs—more salient.” This made people more stressed about how to use cash. In fact, transfers operate within a web of hopes, dynamic needs, pressures, and expectations. These don’t often receive full attention and yet they do matter for outcomes.

 

7. Fiala et al. for presenting one of the longest-term results on the effects of large cash grants

The study extended previous experimental research on a one-off grant introduced in Uganda. Commenced in 2008, the scheme provided groups of young adults (16-35 years of age) with $382/capita. In their update, Fiala et al. track the effects 12 years after the grant distribution, which coincided with the pandemic in September 2020. What did they find? The treatment group reported 20% higher income (mostly driven by men), with beneficiaries also experiencing less severe COVID-19-induced income shocks. But both treatment and control groups are equally likely to be employed, with food security levels also being similar.

 

8. Hill and Friedman for illuminating structural forces shaping the performance of social protection pandemic responses

The authors led a large team producing the latest edition of the Poverty and Shared Prosperity Report. The flagship shows that while global poverty increased during the pandemic, social protection mitigated those effects significantly. Yet performance in higher income settings was significantly better than in lower-income countries. Structural factors can help explain such divergence, including the level of formalization (which affected the ability to use instruments like wage subsidies) and the net effect of tax-transfer systems (lower-income countries tend to display regressive patterns). Furthermore, countries with better access to financing (because of higher sovereign credit rating) achieved larger fiscal responses.

 

9. Baird et al. for identifying trade-offs in objectives among a large cash grant program, and emphasizing the importance of aligning design and desired goals

The authors conducted an experimental study of a generous multifaceted “graduation” program in Tanzania. The scheme involved a randomized provision of assets, entrepreneurial training, and cash transfers. Results up to 36 months after the program show that “… none of the interventions (…), and indeed no combination of them, proves to have a strong effect on beneficiary welfare even in the short term.” Three reasons stand out: the selection of vulnerable individuals was justified as a welfare goal, but may have not been compatible with an entrepreneurial objective; most beneficiaries were already operating in the proposed sectors (which had no barriers to entry); and group investments require well-established rules over co-investment and profit sharing, which wasn’t always the case under the program.

 

10. Mora et al. for arguing that under certain circumstances, cash transfers can have unintended negative effects on beneficiaries’ upward mobility

The authors examine Ecuador’s Bono Desarollo between 2008 and 2014. They find that the combined effects of people’s uncertainty on eligibility criteria, substantial increases in benefit size, and a preference for short-term cash created perverse incentives to remain poor in anticipation of the next recertification. Specifically, eligible households had a lower welfare index in 2014 compared to non-eligible households (except for beneficiaries in the Amazon region). The uncertainty about exiting the program seems to play a key role: in fact, the unintended effects are not observed under a particular component of the program, the old age social pension, intended for anyone of age 66 or older.