SocialProtection- FromProtectiontoProduction

EconomicandProductiveImpactsofUnconditionalCashTransfersinAfrica

AlejandroGrinspunAPPAMInternationalConference

Brussels,14July2017

Objectiveandoutlineofpresentation

ProgramdescriptionCountry Program Targeting Transfer Evaluation

designSurveyyears Samplesize

Ethiopia SCTPP(2011)

Ultra-poor,laborconstrainedhouseholds Variable/Monthly PSM 2012,2014 ~3200hh’s

~10000ind.

Ghana LEAP(2008)

Ultra-poorhouseholdswith(i)singleparentwithOVC,(ii)elderlypoor,(iii)people

withseveredisability

Variableby#ofeligiblehouseholdmembers/

Every2months

LongitudinalPSM

2010,2012,2016

~1500hh’s~6000ind.

Kenya CT-OVC(2004)

Ultra-poorhouseholdswithOVC Flat/Every2months

DIDwithPSM 2007,2009.

2011

1800– 2300hh’s10400– 12800individuals

Lesotho CGP(2010)

Ultra-poorhouseholdswithchildren

Flat,thenvariableby#ofchildren/Quarterly RCT 2011,2013 ~1400hh’s

~8200ind.

Malawi SCT(2006)

Ultra-poor,laborconstrainedhouseholds

Variablebyhouseholdsize+top-upsforschoolattendance/Every2

months

RCT 2013,2014,2015

~3500hh’s~16000ind.

Zambia CG-SCT(2010)

Householdswithchildrenunder5years Flat/Every2months RCT

2010,2012,2013,2014,

2017

2300– 2500hh’s~14000ind.

Zimbabwe HSCT(2011)

Ultra-poor,laborconstrainedhouseholds

Variablebyhouseholdsize/Every2months

Longitudinalmatched

case-control

2013,2014,2017

2600– 3000hh’s12700– 14600individuals

ProfileofCTbeneficiaries• MostCTbeneficiariesliveinruralareas,workforthemselvesanddependonagriculture• 50%- 75%ownlivestock• 80%- 88%producecrops

• Mostgrowlocalstaples,usingtraditionaltechnologyandfewmoderninputs• Mostproductionconsumedonfarm

• Mosthavelowlevelsofproductiveassets• .5- 2hectaresofagriculturalland,fewanimals,basicagricultural

tools,fewyearsofeducation

• Engagedonfarm,non-farmbusiness,casualwagelabor

• Largeshareofchildrenworkonthefamilyfarm• 50%inZambia,30%inLesotho

Householdproductivedecisions• Smallholderfarmersfacebarriersinmultiplemarkets• Marketfailuresincredit,insurance,etc.constraineconomicdecisionsoninvestment,production,laborallocation,risktaking• Shorttimehorizon—imperativeofmeetingimmediateneeds• Lackofliquidity,difficulttomanagerisk

• Decisionsaboutproductionandconsumptionarelinked• Laborneeds(adultsandchildren),includingdomesticchores• Investmentinschoolingandhealth• Foodconsumption,dietarydiversityandnutrition• Intrahouseholddecisionmaking• Dynamicbetweenmenandwomen,oldandyoung

• Obtainingliquidityandmanagingrisktakeprecedenceovermaximizingreturnsofinvestments

Pathwaystoproductiveimpacts• Householdneeds,preferences,riskaversion

o Poverty,foodinsecurityo Meetingsubsistenceneeds,consumptionsmootheningo Hedgingagainstrisk

• Householdcompositiono Able-bodiedadults,numberofdependents

Beneficiaryhouseholdvariables

Programdesignvariables

• Targetingcriteriao Householdswithyoungchildren,OVCs,extremelyvulnerablemembers

• Transfersizeo %ofaveragep.c.householdincome/consumption

• Frequencyoftransferso Regularandpredictable,lumpypayments

Useofmixed-methodsapproach:• Micro-econometricanalysis:ex-postevaluationofprograms,comparingasampleofbeneficiaryhouseholds(treatmentgroup)toasampleofsimilarhouseholdseligibletobutnotreceivingtheprogram(comparisongroup)

• Qualitativeanalysis:keyinformantinterviews,focusgroups,in-depthcasestudiestoexploreimpactsonhouseholdeconomicdecision-makingandthelocaleconomy

• Generalequilibriummodels:Simulationofspillovers andincomemultipliersoftheCTsonthelocaleconomies

Evaluationdesign

Eligible IneligibleEligible Ineligible

Treatedvillages Controlvillages

Indirectbenefits(spillovers)Directimpactofprogram

RESULTS

Cropproduction• Increaseincropproductionandsales• Lesotho:significantincreaseinmaize,sorghumandvegetableproduction,mostlyforownconsumptionduetohighlevelsoffoodinsecurity

• Zambia:riseinagriculturaloutput/value,cropsalesandhomeconsumptionofmorenutritiousstaples

• Moveawayfromtraditionaltomorenutritious,higher-valuecrops• Zimbabwe:Switchfromfingermillettogroundnutsandpearlmillet

• Ethiopia:Barleyfellbutoverallvalueofproductionrose,drivenbyhighersorghumyields

• Malawi:Increaseingroundnutproduction,shareofhh’s cultivatingpigeonpeafell

• Heterogeneityofimpacts

Agriculturalinputsandassets• Significantimpactsonexpendituresonanduseofagriculturalinputs(seeds,fertilizersandpesticides)• Increasedspendingincropinputs(seeds)andlargeincreaseinoperatedland(onethirdofbaselinemean)inZambia

• SimilarincreasesintheshareofhouseholdspurchasingseedsandchemicalfertilizersinLesotho

• Increaseinseedexpenditures(Ghana)anduseoforganicfertilizers(MalawiandEthiopia)

• Increasedinvestmentinassets,thoughlimitedtoownershiporuseofsmallagriculturaltools• DramaticincreaseinZambia,bothinshareofhouseholdsowningagriculturalassetsandnumberofassetsowned

• Moreselectiveimpactsinothercountries(Ethiopia,MalawiandZimbabwe)

Livestock• Positiveimpactonlivestockaccumulation• LargeeffectsonshareofhouseholdsinvestinginanimalspeciesandonthenumberoflivestockinMalawiandZambia(esp.chicken)• MorelimitedeffectsinLesotho(pigs)andKenyaandZimbabwe(smallruminants)• NoimpactonlivestockownershipinGhanaandEthiopia

• Livestockownershipoftenseenasrisk-copingstrategy,second-bestforprecautionarysavings• Anincreaseinlivestockrearingcouldbeameanstoovercomebarrierstoinsuranceandcreditmarkets,ratherthananincreaseinproductiveinvestments

LaboruseReallocationoflaborwithinandoutsidethehousehold

• Reductionincasualagriculturalwagelabor…,• InMalawi,17fewerdaysofganyu byadultmalesinlast12months

• … oftenoffsetbyanincreaseinon-farmwork• InZambia,declineinagwagelaborparticipationwascompensatedbyincreaseofworkonandoff-farm(20daysand1.6daysweekly,resp.)

• Ghana:almost8moredaysofworkbyadultmalesinownfarms

• Reducedparticipationofchildreninfamilyfarming

• Nosignsofdisincentivestowork,reductionsintotallaborsupplyordependency• Morechoicewhentoseekagwageworkduringtheleanseason

Reductioninagriculturalwagelabor

ZambiaCGP

MalawiSCTP

ZimbabweHSCT

LesothoCGP

KenyaCT-OVC

EthiopiaSCTPP

GhanaLEAP

Agricultural/casualwagelabor

-- -- NS -- -- NS

Familyfarm ++ NS(1) -- NS(1) NS +

Non-farmbusiness ++ NS(2) NS NS NS -- NS

Nonagriculturalwagelabor

++ +/NS(3) NS NS NS - NS

(1)variesbyageandgender(2)variesbytypeofbusiness(3)NSatmidline,positiveatendline

• Shiftfromcasualwagelabortofamilybusiness,consistentlyreportedinqualitativefieldwork

• Nogeneralworkdisincentiveorreductionofworkeffort

Reductionofchildren’swork

Wage/casual labor Familyfarm

EthiopiaSCTPP NS(1) -- (3)

GhanaLEAP NS NS

KenyaCT-OVC NS --

LesothoCGP NS --

MalawiSCTP - (2) NS

ZambiaCGP NS NS

ZimbabweHSCT NS NS/- (4)

(1) significantreductionforboys(2) strongerforolderboysinganyu(2)decreaseforyoungerchildren(3)strongerforgirls

(1)valueofagproduction(2)NSatmidline,strongatendline(3)animalproducts(4)variesbytypeofbusiness(5)smallerhouseholds(6)switchingcrops

Impacts onproductiveactivities

Stronger impact Mixedimpact Lessimpact

ZambiaCGP

MalawiSCTP

ZimbabweHSCT

LesothoCGP

KenyaCT-OVC

EthiopiaSCTPP

GhanaLEAP

Agriculturalinputs ++ + NS + - -/+ +

Agriculturaltools ++ ++ +(5) NS NS + NS

Agriculturalproduction ++(1) ++(2) ++(6) + NS ++ NS

Agriculturalsales ++ + NS NS -

Homeconsumptionofagriculturalproduction

NS ++(3) NS + NS

Livestockownership Alltypes Alltypes Mosttypes Pigs Smallruminants - NS

Non-farmenterprise ++ NS(4) ++ NS +FHH/- MHH NS NS

Riskmanagement• Householdsdiversifiedincomesources,increasingtheirengagementinnon-farmbusinesses…• Significantincreaseinshareofhouseholdsoperatingnon-farmenterprisesinZambiaandZimbabwe

• … Orswitchingtolessphysicallydemandingnon-farmactivities• Reductionincharcoal/firewoodbusinessesandriseinpettytradinginMalawi

• CTscontributedtodebtrepayments,savingsandareductionofloansanddistresssalesofassets intimesofhardship• PositiveimpactsinGhana(savings,borrowinganddebtrepayment),Malawi(distresssalesofassets)andZambia(borrowinganddebtrepayment)

• CTbeneficiarieswerelesslikelytochangeeatingpatternsortaketheirchildrenoutofschoolandsendthemtoworkorliveelsewhere

• Impactsoftenstrongeramongmorevulnerablehouseholds

Engagementinreciprocitynetworks

• Ingeneral,CTsreinforcedsocialnetworksbyincreasinginformaltransferswithincommunitiesandincreasingparticipationofthepooresthouseholdsinthesenetworks• Statisticallysignificantimpactsonreceipt/provisionofinformaltransfersfoundinGhana,LesothoandZimbabwe,especiallygivinggiftsandfood-sharingarrangements

• NoevidenceofCTscrowdingoutprivateremittances

• QualitativeworkconfirmedthatCTsincreasedself-esteem,trustandsocialcapital,andallowedbeneficiariestore-joinexistingnetworksorstrengtheninformalinsuranceandrisk-sharingarrangements.

ZambiaCGP

MalawiSCTP

ZimbabweHSCT

LesothoCGP

KenyaCT-OVC

EthiopiaSCTPP

GhanaLEAP

Negativeriskcoping -- +Payoffdebt ++ ++ NS NS ++Borrowing -- - NS NS NS +/- --Purchaseoncredit NS -- + NS NS NSSavings ++ NS +Giveinformaltransfers NS NS ++ NS ++

Receiveinformaltransfers NS + ++ NS ++

Remittances NS -- NS

Riskmanagementandsocialnetworks

• Reductioninnegativeriskcopingstrategies

• Increaseinsavings,payingoffdebtandcreditworthiness—riskaversion

Strengthenedsocialnetworks• Inallcountries,re-engagementwithsocialnetworksofreciprocity—informalsafetynet

• Allowhouseholdstoparticipate,to“mingle”again

DRIVERSOFIMPACTS

Agedistributionofprogrambeneficiaries0

.01

.02

.03

.04

Den

sity

0 50 10010 20 30 40 60 70 80 90Age in years

kernel = epanechnikov, bandwidth = 1.8142

Age distributionKenya

0.0

1.0

2.0

3.0

4D

ensi

ty

0 20 40 60 80 10010 30 50 70 90Age in years

kernel = epanechnikov, bandwidth = 2.9809

Age distribitionMalawi

0.0

1.0

2.0

3.0

4D

ensi

ty

0 20 40 60 80 10010 30 50 70 90Age in years

kernel = epanechnikov, bandwidth = 3.1377

Age distributionZimbabwe

0.0

1.0

2.0

3.0

4.0

5D

ensi

ty

0 20 40 60 80 10010 30 50 70 90Age in years

kernel = epanechnikov, bandwidth = 1.9700

Age distributionZambia

Pre-schoolers

Older childrenand adolescents

Prime-ageadults

Elderly

Sizeoftransfer

Selectiveimpact

Widespreadimpact

Predictabilityofpayment

Regularandpredictabletransfersfacilitateplanning,consumptionsmoothingandinvestment

0

1

Sep-10

Nov-10

Jan-11

Mar-11

May-11

Jul-1

1

Sep-11

Nov-11

Jan-12

Mar-12

May-12

Jul-1

2

Sep-12

#ofpaymen

ts

ZambiaCGP

0

1

2

3

4

5

6

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

Jun-11

Aug-11

Oct-11

Dec-11

Feb-12

Apr-12

#ofpaymen

ts

GhanaLEAP

RegularandpredictableLumpyandirregular

Take-homemessages

• SCTstargetedtopoorestcan haveproductiveimpacts• Relaxingsomeofconstraintsbroughtonbymarketfailure(lackofaccesstocredit,insurance)

• Helpinghouseholdsmanagerisk• Increasingpurchasingpowerandprovidingliquidity

• SCTscanreduceburdenonsocialnetworksandinformalinsurancemechanisms• Longtermeffectsofimprovedhumancapital• Nutritionalandhealthstatus;educationalattainment• Laborproductivityandemployability

• Infusionofcashcanleadtomultipliereffectsinlocalvillageeconomy

Take-homemessages

• Programdesignandimplementationmatters!• Targetingcriteria:laborconstrainedultrapoorvshouseholdswithlaborcapacity

• Transfersize(between20-30%ofmeanhh consumption)• Regularityandpredictabilityofpayments• Messaging

• Spilloverandincomemultipliershigherwhensupplyrespondstoriseindemandtriggeredbycashinjection• Importanceofcomplementaryinterventionsonagricultureside

• Noevidenceofworkdisincentivesordependency

EDITEDBYB.DAVIS,S.HANDAETAL.,2016.DAIDONE,S.,B.DAVIS,S.HANDA,P.WINTERS,2017.

Thankyou!