Panel Paper: Can Unconditional Cash Transfers Lead to Sustainable Poverty Reduction? Evidence from Zambia

Saturday, November 4, 2017
Burnham (Hyatt Regency Chicago)

*Names in bold indicate Presenter

David Seidenfeld, American Institutes for Research

Worldwide close to 800 million people are reached by state-operated cash transfer programmes. In sub-Saharan Africa, the poorest region in the world, the number of cash transfer programmes has doubled in the last five years and reaches close to 50 million people. What is the impact of these programmes, and do they offer a sustained pathway out of ultra-poverty? In this paper we examine these questions using experimental data from two unconditional cash transfer programmes implemented by the Government of Zambia. We find far-reaching effects of these two programmes, not just on their primary objective, food security and consumption, but also on a range of productive and economic outcomes. After three years, we observe that household spending is 59 per cent larger than the value of the transfer received, implying a sizeable multiplier effect. These multipliers work through increased non-farm business activity and agricultural production.