Five cash transfer programs in five countries: What can we say about the potential for social cash transfer programs to deliver economic gains to the rural poor?
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http://www.fao.org/economic/PtoP/en/ Presentation given by FAO economists Solomon Asfaw and Joshua Dewbre on results of a cross country analysis on the impacts of social cash transfer programmes on a set of economic outcomes of the rural poor in Malawi, Kenya, Ghana, Zambia, and Lesotho.
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Five cash transfer programs in five countries: What can we say about the potential for social cash transfer programs to deliver economic gains to the rural poor?
- 1. Five cash transfer programs in five countries: What can we say about the potential for SCT programs to deliver economic gains to the rural poor? Solomon Asfaw and Joshua Dewbre ESA Seminar Thursday, April 17, 2014 Rome, Italy
- 2. Impact evaluations across SSA countries • Malawi SCT – Mchinji pilot, 2008-2009 – Expansion, 2013-2014 • Kenya – CT OVC, Pilot 2007-2011 – CT OVC, Expansion, 2012-2014 – HSNP, Pilot 2010-2012 • Mozambique PSA – Expansion, 2008-2009 • Zambia – Monze pilot, 2007-2010 – Child Grant, 2010-2013 • South Africa CSG – Retrospective, 2010 • Burkina Faso – Experiment, 2008-2010 • Ethiopia – PNSP, 2006-2010 – Tigray SPP, 2012-2014 • Ghana LEAP – Pilot, 2010-2012 • Lesotho, CGP – Pilot, 2011-2013 • Uganda, SAGE – Pilot, 2012-2014 • Zimbabwe, SCT – Pilot, 2013-2015 • Tanzania, TASAF – Pilot, 2009-2012 – Expansion, 2012-2014
- 3. What we hypothesized Primary targets: income safety net + investment in health & education of children. But reasons to believe the transfer might enable: ► increased investment in productive activity: on & off-farm ► investment in crop inputs and farm implements ► purchases of livestock ► increase in labor devoted to more productive and desirable employment ► reduction in less desirable forms of employment (casual piece job agricultural labor) ► participation in social networks of reciprocity and support ...so, what do we see?
- 4. Analytical framework Pre-program level program execution Post program level Comparison group Program group ΔP ΔC Impact ΔP = Change in level of program group ΔC = Change in level of comparison group ΔP-ΔC = Impact of program (DD) ► Randomized phase-in of beneficiaries creates treatment (T) and control groups (C) ► Impacts are established comparing changes in indicators between T and C (difference-in-differences)
- 5. What we find: productive activities Zambia Malawi Kenya Lesotho Ghana Agricultural inputs +++ -‐ -‐ -‐ ++ +++ Agricultural tools +++ +++ NS NS NS Agricultural produc4on +++ NS ++(1) NS Home produc4on of food NS +++ +++ NS Livestock ownership All types All types Small ++(2) NS Non farm enterprise (NFE) +++ NS +FHH NS NS 1) Maize and garden plot vegetables 2) Pigs
- 6. What we find: labor allocation adults Zambia Kenya Malawi Lesotho Ghana Agricultural/casual wage labor -‐ -‐ -‐ -‐ -‐ -‐ -‐ -‐ -‐ -‐-‐ NS Family farm +++ +++ +++ NS +++ Non farm business (NFE) +++ +++ NS NS Non agricultural wage labor +++ NS NS NS NS children Wage labor NS NS -‐ -‐ -‐ NS NS Family farm NS -‐ -‐ -‐ (1) +++ NS NS 1) Particularly older boys Shift from to own farm No clear picture on child labor (but usually positive impacts on schooling)
- 7. What we find: social networks and risk coping strategies Zambia Kenya Malawi Ghana Lesotho Nega4ve risk coping -‐ -‐ -‐ -‐ -‐ -‐ Pay off debt +++ +++ NS Borrowing -‐ -‐ -‐ NS -‐ -‐ -‐ NS Purchase on credit NS NS NS Savings +++ +++ +++ Give informal transfers NS +++ +++ Receive informal transfers -‐ -‐ -‐ NS +++ Qualitative results: Ø Re-engagement with social networks, re-investing in alliances and social security Ø Allow to participate, to “mingle” again Ø Increase in savings, paying off debt and credit worthiness
- 8. What we find: food security Zambia Kenya Malawi Ghana Lesotho Inadequate for @ least 1 month NS Months with sufficient food +++ NS Months some shortage +++ Months extra shortage -‐ -‐ -‐ Eats more than one meal a day +++ +++ Food security scale +++ +++ +++ NS Is not severely food insecure +++ BeSer off than 12 months ago +++ Child smaller meal -‐ -‐ -‐ Child fewer meals than needed -‐ -‐ -‐ -‐ -‐ -‐ Child sleep hungry -‐ -‐ -‐ NS Food security asked about in different ways across countries. All, however, positive.
- 9. What we find: nutri/on Zambia Kenya (1) Malawi Ghana Lesotho Meat +++ +++ +++ -‐ -‐ -‐ NS Dairy +++ +++ +++ NS NS Cereals +++ NS +++ NS NS Fruits/vegetables NS NS +++ NS NS Sugars +++ +++ +++ NS NS Fats, oil, other +++ +++ +++ +++ NS Dietary diversity +++ +++ +++ NS NS 1) 2007-‐2009 no impact Big impact
- 10. What explains difference in impact? Crop Livestock NFE Produc/ve labor Social Network Food security Zambia yes yes yes yes yes Malawi yes yes no yes small yes Kenya no small yes yes Lesotho yes small no no yes yes Ghana no no no small small small
- 11. Targeting important è Transfers impact productive outcomes more if targeted to less labor constrained hhlds Under 5 5 to 9 10 to 14 15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 65 to 69 70 to 74 75 to 79 80 to 84 85 to 89 Over 90 1000 500 500 1000population Males Females Ghana LEAP Under 5 5 to 9 10 to 14 15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 65 to 69 70 to 74 75 to 79 80 to 84 85 to 89 Over 90 2000 500 500 2000population Males Females Zambia CGP
- 12. Predictability of payment important è Reliable source of income enables appropriate planning, which leads to consumption smoothing and investment. 0 1 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 #ofpayments Zambia CGP 0 1 2 3 4 5 6 #ofpayments Ghana LEAP
- 13. Value of transfer important 0 5 10 15 20 25 30 35 40 Ghana LEAP (old) Kenya CT-OVC (big) Burkina Kenya CT-OVC RSA CSG Lesotho CGP (base) Ghana LEAP (current) Kenya CT-OVC (small) Zim (HSCT) Zambia CGP Zambia MCP Malawi SCT Widespread impact Selective impact %orpercapitaincomeofpoor è Little impact for transfers <20-30% of per capita consumption
- 14. …and account for inflation è None indexed with inflation, though value of transfer adjusted in some countries. 0 1,000 2,000 3,000 KenyanShilling 2007 2008 2009 2010 2011 Kenya CT-OVC erosion of transfer
- 15. …evidence cash transfers need not be conditional Zambia Kenya (1) Malawi Ghana Lesotho Total +++ +++ +++ NS NS Food +++ +++ +++ NS NS Educa4on NS NS NS NS +++ Health +++ +++ +++ NS NS Clothing +++ +++ (2) NS +++ Alcohol/tobacco NS NS NS NS -‐ -‐ -‐ 1) 2007-2009 2) Changes of clothing, not consumption per se unique
- 16. For each Cedi transferred local income increases by 2.5 Cedi (90% CI: 2.38-2.65) Nearly all the spillover goes to non- beneficiary households Local economy and supply response important
- 17. Production constraints can limit supply response, which may lead to higher prices and a lower multiplier If supply response is constrained, real income multiplier can be as low as 1.50
- 18. Size of income multiplier varies by context Differences across countries: Openness of local economies Where money is spent in local economy 0 0.5 1 1.5 2 2.5 3 Kenya (Nyanza) Ethiopia (Abi- Adi) Zimbabwe Zambia Kenya (Garissa) Lesotho Ghana Ethiopia (Hintalo) Nominal multiplier Real multiplier
- 19. ► Demographic profile of beneficiary households • Available labor: OVC? Households with young children? ► Relevance of messaging and soft conditions on social spending ► Access to productive assets ► Value of the transfer relative to the total expenditure ► Relative importance of subsistence agriculture, diversity of the local economy, nature of market constraints : e.g. openness of local economies, where money is spent in local economy ► Coordination with other interventions Differences across countries: in summary Relative impacts between programmes dependent on:
- 20. Making cash transfers more productive: operational and policy 1. Ensure transfers meet threshold & sustain them over time 2. Ensure payment predictability 3. Link transfers to supply side interventions 4. Target households with higher potential to sustainably achieve self-reliance (e.g. less labour constrained households) 5. Consider messaging: unconditional cash transfers successful in achieving desired outcomes; sharpen focus towards productive objectives?
- 21. Cash transfers needs to be part of a rural development strategy ► Potential conflicts with social objectives but on other hand, social ministries increasingly recognize the need to focus on livelihoods as well ► Cash transfer programmes cannot replace sector economic development strategy, nor do they constitute a motor of growth in and of themselves ► Almost three quarters of economically active rural population are smallholders, most producing own food ► Small holder agriculture as key for rural poverty reduction and food security in Sub Saharan Africa – Relies on increased productivity, profitability and sustainability of small holder farming ► Social protection and agriculture need to be articulated as part of strategy of rural development – Link to graduation strategies
- 22. Our websites From Protection to Production Project http://www.fao.org/economic/PtoP/en/ The Transfer Project http://www.cpc.unc.edu/projects/transfer