Published on Development Impact

Does psycho-social support to the chronically poor reduce poverty?

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Psycho-social well-being is a catch-all term that encompasses both psychological and social dimensions of life. This broad domain of welfare is typically correlated with traditional poverty measures – the economic poor also often exhibit low levels of psycho-social health and functioning. But does this correlation capture a causal relation running from low levels of psycho-social health to poverty? And, if so, can intervening in the psycho-social domain reduce poverty?

There are precious few impact evaluations that test the influence of psycho-social interventions on economic behavior or poverty reduction. (One relatively little known RCT study from the U.S. finds that successfully treating depression increases labor force participation by twenty percentage points!) Well now an evaluation of Chile Solidario, an innovative anti-poverty program from (as you might guess) Chile, is adding to this literature.

Chile Solidario adopts an integrated approach to poverty reduction and is targeted to the roughly 4% of the Chilean population deemed living in extreme poverty. The program combines information, skill-development, and psycho-social support delivered through a social worker. The program also transfers a small amount of cash meant to compensate for the transactions costs incurred by households when enrolling in social services. The motivating idea behind the program is to instill confidence and build the necessary social tools so the indigent poor can access existing social services and seek employment programs and occupational training. Increased access was the first order goal of the program since many of Chile’s indigent poor do not participate in the existing poverty programs for which they are the intended beneficiaries.

Pedro Carneiro, Emanuela Galasso, and Rita Ginja have evaluated the impacts of Chile Solidario. The first summary results can be found in this short policy note and a multitude of initial findings are in this report.

The authors use both administrative and specially collected survey data to look across a range of outcomes. The causal impacts of the program are estimated with a regression discontinuity design (RDD). A well-known interpretive difficulty with RD D is that it identifies program effects around the discontinuity created by eligibility rules but may not have much validity for the program effects on populations further from the eligibility cut-off. In this case, since the eligibility cut-offs were municipality specific and varied widely around the country, worries with generalizability are less of a concern.

Taken all together, the program increases the uptake of the various subsidy programs available to poor households in Chile. This increased access translates most directly into improvements in the quality of housing as well as in formal ownership of housing. Program participants also become more optimistic about the future and younger households are less likely to experience family dissolution. However other psycho-social measures such as self-efficacy show little improvement.

There doesn’t appear to be much effect on employment and earnings of the household head but this may be because the head, especially if the head is male, is already economically active. However there are significant gains in the employment and earnings of secondary household members and in particular gains for the spouse of the head.

Taken overall, Chile Solidario appears to have been successful in certain dimensions but, as the authors state, much more analysis and work is to come. We will invite Pedro, Emanuela, and Rita to blog about various aspects of this work in more detail, so hopefully you will hear directly from them soon!



Jed Friedman

Lead Economist, Development Research Group, World Bank

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