Panel Paper: Productive Impact of Unconditional Cash Transfer Program: Evidence From Randomized Experiment In Kenya

Thursday, November 8, 2012 : 3:00 PM
Hanover B (Radisson Plaza Lord Baltimore Hotel)

*Names in bold indicate Presenter

Benjamin Davis1, Soloman Asfaw1, Giovanni Federighi1, Sudhanshu Handa2 and Paul Winters3, (1)Food and Agriculture Organization of the United Nations, (2)University of North Carolina, Chapel Hill, (3)American University

The Kenya Cash Transfer Program for Orphans and Vulnerable Children (CT-OVC) is the Government’s flagship social protection program, and is designed to provide cash assistance to households caring for OVC while encouraging OVC human capital development. However, we would expect these programs to have impacts on the economic livelihoods of beneficiaries as well. Cash influences the livelihood strategies of the poor, who in rural areas depend on subsistence agriculture and live in places where markets for financial services (such as credit and insurance), labor, goods and inputs are lacking or do not function well. The objective of this paper is therefore to analyze the impact of the program on household decision making regarding productive activities, including labor allocation, self-employment and crop and livestock production.

This paper used data collected at the baseline (2007) and in the second follow up (2011) of a randomized experimental design impact evaluation to analyze the impact of the program on household decision making. The general framework for empirical analysis is based on a comparison of program beneficiary with a group of controls, interviewed before the program began and again four years later using difference in difference (DD) estimators and propensity score matching (PSM). The preliminary results so far showed that the program has modest impact on accumulation of productive asset although there was a strong positive impact on consumption spending especially among small families. The results also suggested that the program enables females who are far from the market to participate in wage work (i.e. mitigates barrier to work) and at the same time reduces the participation particularly among chronically disabled females. Although there was no impact on child wage labor, the program has resulted in a significant reduction in own farm child labor. Analysis on most of these areas is still ongoing and we would like to assure to bring full analytical results to APPAM conference.