What are the impacts of cash transfer schemes?

1. COUNTRIES Ethiopia Lesotho Malawi Zambia South Africa What are the impacts of cash transfer schemes? IMPACTS • Maternal / child health & development • Vulnerable populations (OVC, PLWHA, elderly) • Nutrition • Food security • Economic empowerment • Asset accumulation

2. Ethiopia John Hoddinott IFPRI j.hoddinott@cgiar.org

3. Impact of Ethiopia’s Productive Safety Nets Programme • Against the background of rising food prices and widespread drought, participation in the public works component of the PSNP between 2006 and 2008 had modest effects. It: • Improves food security by 0.40 months • Increased growth in livestock holdings by 0.28 Tropical Livestock Units (TLU). • Improved the resilience of households as measured by their ability to raise funds in an emergency; and • Relative to non-beneficiaries, beneficiary households perceive that their welfare has improved. • These aggregate results – generated by the use of matching methods - mask important differences within the sample of beneficiary households.

4. Impact of the PSNP, cont’d Program impacts on asset accumulation are greater when higher levels of transfers are received and when participants have access to both the PSNP and agricultural productivity packages such as improved seeds. On average, households receiving high levels of transfers had a 14.3 percent higher growth rate in the value of their livestock holdings. Access only to public works transfers, or only to specific agricultural packages of services such as irrigation or seeds, had no effect on agricultural productivity as measured by wheat or maize yields. By contrast, households where both public works transfers and these services were received saw large increases—over 200 kg/ha—in wheat and maize yields.

5. Impact of the PSNP, cont’d Payment for at least 10 days work per month in the three months prior to the 2008 survey improved food security, even though food prices were rising dramatically at the time. These households experienced a 19.2-percent higher growth rate in caloric acquisition and higher growth in livestock holdings. The PSNP does indeed act as a safety net. Restricting the treatment group to households that received at least 10 days work per month in the three months prior to the 2008 survey and reported being affected by drought, program participation increases the growth rate of caloric acquisition by 30 percent.

6. Impact of the PSNP, cont’d Receipt of public works transfers under the PSNP crowds out private transfers, but by a very small amount There is no meaningful evidence that participation in Public Works employment has a disincentive effect on adult male or female labor employed in nonfarm own-business activities, wage employment, or work on the family farm. When payments are near the level intended in the program design, school attendance rates increase substantially for boys (19 percentage points), and for girls age 11-16 years (15 percentage points). PSNP public works transfers plus agricultural productivity packages increase child labor by girls by (4.5 hours per week). There was no evidence that receipt of PSNP transfers improves child anthropometric status.

7. Lesotho David Croome dr.croome@nul.ls

8. LESOTHO PENSION CHILD HEALTH - 1 Health of babies relatively good but significant growth problems from malnutrition as children get old • Pension seen as household income, allocated by pensioner • 20% used for health, mainly access to local doctors and clinics. • Use for children’s health not specified • Pension cash used for transport to clinics and for medicines

9. LESOTHO PENSION CHILD HEALTH - 2 • When pension started, clinics required user fees, especially in church-owned facilities (50% of all provision) • 2009, clinic fees abolished, but still cost for transport etc. More use being made of facilities

10. LESOTHO PENSION CHILD HEALTH - 3 • Children benefiting from pension cash providing more food in the household. • General situation: Effect of pension probably quite small. Need more active community health service to take health care to the children in school (Free primary education 90% kids in school)

11. LESOTHO PENSION VULNERABLE GROUPS - 1 Orphans and Vulnerable children (OVCs) • AIDS related vast increase in OVC number • 200,000 = 10% of population • 60% of pensioners claim to be left with 1 or more OVCs to look after. ( n.b, OVC dumping, pensioner has a little regular cash and cannot run away) • Real problems of caring. Old people unaware of modern needs for care. Esp. for HIV infected children, needs from schooling. • ? Additional pension for OVC carers.

12. LESOTHO PENSION VULNERABLE GROUPS - 2 Women • Over 75% pensioners are women. In Lesotho a large proportion (> 80%) are literate • Strong evidence that pensioner and households agree that pension belongs to the pensioner, who must the decide allocation within household. • Substantial evidence that position of old women is enhanced, spending allocations accepted (<5% of occasions where pensioner subject to violence)

13. LESOTHO PENSION VULNERABLE GROUPS - 3 • Case History – Me Marabeki • Widow looking after 4 OVC grandchildren in her small hut in local village. Little cash income from her own children. • Did not claim pension because she misunderstood documentation required. Children’s situation seen by teacher. Arranges for her to get pension • But, chooses to spend money on getting rid of her mourning clothes, worn for death of daughter and fund family celebrations

14. LESOTHO PENSION NUTRITION - 1 • 55% of Basotho households classified as ‘chronically hungry’ In mountain areas may be 70%. No cash incomes, subsistence farming opportunities poor. • Pension makes significant difference, chronic hunger cut by up to 50%, esp. in v. poor areas • Not much evidence of pension invested in improving yields from subsistence farming. C 3% used for seed, fertilizers, more livestock

15. LESOTHO PENSION NUTRITION - 2 • 60-70% of pension cash used for food for household. Pensioner get 40% of this. • Cash grant used to buy shop foods, esp. meat, dairy products, sweets , pasta, rice, biscuits • Evidence of some extra expenditure on alcohol and tobacco • Contributions to church and charities

16. LESOTHO PENSION FOOD SECURITY • Little evidence from surveys/ but, pension seen as a vital safety net for food purchases in times of drought and failure of subsistence farming • Pension could probably supply half the amount of food needed for household in month, if no other resources available. Note availability of free primary school meals • Food expenditure smoothing, traders will make short term loans for food on the security of pension

17. LESOTHO PENSION ECONOMIC EMPOWERMENT 1 • Expenditure smoothing • Local job creation, but small scale and may be replacing previous unpaid services • May help most those that already are above the poverty /chronic hunger line

18. LESOTHO PENSION ECONOMIC EMPOWERMENT- 2 • Some , mostly anecdotal evidence that some women are released from role of care givers to the elderly relations. This now provided by local non-relatives paid for from pension. Released women can get jobs in textile factories

19. LESOTHO PENSION ASSET ACCUMULATION • Little evidence of this from surveys. 98% of pension is spent, almost all on immediate consumption. But • I) Surveys done soon after pension first grated. Asset accumulation needs longer term planning • II) Surveys done in areas with few of the 20% in general population considered well off ( Lesotho has very skewed income distribution, low A prop to save, poor financial structures to help saving) • SHOULD MORE ATTENTION BE GIVEN TO HELPING PENSIONERS SAVE AND INVEST ?

20. LESOTHO PENSION WIDER ECONOMIC IMPACTS • Total flow of new cash into the area [probably too small to have much general impact. Note that national, expenditure multiplier very small because 70% of consumption goods are imported • Some immediate benefits for local traders on pension days, but traders often not from the permanent community. • Lesotho has a poor record of using d=extra funding for development purposes. Poor implementation, alleged political interference. Main value of pension is at micro level of household.

21. Malawi Candace Miller Boston University candace@bu.edu

22. KUFUNA KUMVETSA MCHINJI CASH TRANSFER Anthropometry (children < 5) Key: C= Comparison/control household; I = Intervention household; Miller, Tsoka, Reichert. (2009). The Malawi Social Cash Transfer and the impact of $14 per month on child health and growth. In review.

23. KUFUNA KUMVETSA MCHINJI CASH TRANSFER Height gain and recent illnesses Height gain in centimeters Recent illnesses Key: C= Comparison/control household; I = Intervention household; Miller, Tsoka, Reichert. (2009). The Malawi Social Cash Transfer and the impact of $14 per month on child health and growth. In review.

24. KUFUNA KUMVETSA MCHINJI CASH TRANSFER Education and child work

25. Food security and nutrition: (16,16) Focus Groups with children (n=169 children 16 groups) “We are not starving anymore because they buy us food everyday (F, 9)” “We are happy now…in the past we were not eating in the afternoon and sometimes in the evening. Now we are able to eat 3 times a day. We are able to eat good food like meat and fish (F,10)” “Now we don’t frequently get ill since we are eating different types of food to make our bodies strong (M,15) KUFUNA KUMVETSA MCHINJI CASH TRANSFER

26. We are also benefiting by getting good education because we have uniforms and we are going to school everyday (F,13)” “We have more chance because we have everything in life, our parents receive money from the cash transfer; we have food, school uniforms, exercise books, pens, and clothes. While our friends don’t have that…(F,13)” “We are also scoring good grades because we are very attentive in class because we eat good food, we have uniforms and books and pencils due to scheme money (F,12)” KUFUNA KUMVETSA MCHINJI CASH TRANSFER Education: Increased attendance/performance, school fees paid, purchased uniforms (16/16)

27. KUFUNA KUMVETSA MCHINJI CASH TRANSFER PLWHA (in depth interviews n=24)

28. KUFUNA KUMVETSA MCHINJI CASH TRANSFER Complementary healthcare • I am [now] able to receive the ARV at hospital … I am able to buy medicine or use the money for transport to receive the ARV tablets. (F,30) • The frequency of falling sick has dropped now since receiving the transfers because I have something for food and painkillers (F,55) • So we use the money that we receive for transport once every 2 months to go and collect these ARV drugs from hospital (F,38)

29. KUFUNA KUMVETSA MCHINJI CASH TRANSFER Economic support / empowerment: Can work or buy labor • I can now have my garden cultivated because the money I receive from the scheme enables me to pay for labor…nowadays, I am able to have at least half of my field cultivated. (F,33) • We use this money as pay wages to those who are farming on our field. (M,48) • Since 2004, I was bed ridden and could not work but now I can do a little. (F,30) • I also grow sunflower for making cooking oil. (F, 28) • I am able to buy chickens and managed to pay for casual labour. (F, 44)

30. KUFUNA KUMVETSA MCHINJI CASH TRANSFER Livestock/crops • I managed to buy a goat with this money…I had to save the money for 3 months... I also bought 3 chickens. (F, 42) • I bought one goat. I also bought 3 chickens but all these died. I bought one bag of fertilizer … (F, 54) • I was also able to buy goats and build kraal for livestock. Able to keep [buy] fertilizer for this coming farming season. Managed to pay … for ganyu people (F, 43) • I afford fertilizer last season and yield one ox-cart .... I have also managed to buy a goat … in two installments. (F, 37) • I bought one pig which had piglets, but now there is one piglet, others died. I saved … for fertilizer. Salt and milling fees were a problem, but now they are available. (M, 33)

31. KUFUNA KUMVETSA MCHINJI CASH TRANSFER Food security and diversity HH food consumption is less than enough HH members consume at least 2 meals daily Households consuming meat / fish past week Food Diversity Score Miller, C., Tsoka, M, and Reichert, K. (2009). The impact of the Social Cash Transfer Scheme on food security in Malawi.In review.

32. Double difference intervention & comparison groups Weekly food expenditures KUFUNA KUMVETSA MCHINJI CASH TRANSFER This is the difference in the amount of MK per week added into the local economy for food due to the SCTS for various items

33. KUFUNA KUMVETSA MCHINJI CASH TRANSFER Asset ownership

34. KUFUNA KUMVETSA MCHINJI CASH TRANSFER SCTS households Comparison (non-SCTS households) Asset ownership Sickle Axe Chickens Goats

35. KUFUNA KUMVETSA MCHINJI CASH TRANSFER Percent of households that purchased items between baseline and endline SCTS households Comparison (non-SCTS households)

36. KUFUNA KUMVETSA MCHINJI CASH TRANSFER Larger Economic Impacts • About 90-95% of cash transfer money is fed back into local economy through purchase of • Food • Household items • Services • Many businesses benefit through increased sales smoothing seasonal cycles; in turn, they build capital • Cash transfers recipients indirectly support family members outside of the household through labor, gifts, loans • Households that receive indirect inputs are able to purchase food, household items, healthcare etc.

37. Zambia Gelson Tembo University of Zambia tembogel@zamnet.zm tembogel@yahoo.com

38. Impact of Social Cash Transfers on Household Welfare, Investment and Education in Zambia Ministry of Community Development and Social Services

39. Introduction • 5 Social Cash Transfer (SCT) pilots in Zambia • Kalomo launched in May 2004, to be used as a model for the proposed national scale-up • Unconditional SCT scheme targeting the 10% most labour-constrained “ultra-poor” • The scheme was set up to meet the following objectives; • Reduce extreme poverty amongst the poorest 10% in the district • Generate information on feasibility, costs and benefits and all positive and negative impacts of SCT as one component of a comprehensive SP programme • Community-based targeting 39

40. SCT Pilots in Zambia Source: adapted and updated from Zambia, 2007, The Pilot Social Cash Transfer Scheme, Zambia, Summary Report, 5th Edition, Lusaka: MCDSS/GTZ, May (Table 5, p.14) 40

41. Objectives of the Impact Evaluation • identify factors that explain household participation in the SCT programmes among eligible households • determine the impact of the SCT interventions on: • welfare • investment • education • determine the impact of asset wealth on the effectiveness of the SCT programmes 41

42. Impact Evaluation 42

43. Methodology • Propensity score matching (PSM) through odds-weighted regression analysis was used to estimate impact • Propensity score satisfied a battery of balancing and common support tests • Impact was estimated both as an aggregate measure and disaggregated by asset wealth • A household was categorized as “asset poor” if it fell in the bottom two quintiles of the distribution of an asset wealth index, • Wealth index constructed using principal components analysis (PCA) 43

44. Characteristics of the sample households 44

45. Determinants of Participation in the SCTs • Largely consistent with postulated targeting criteria • Widowhood (Kalomo/Chipata) • Age of HH head (Kalomo/Chipata) • Wealth status (Kalomo) • Household composition (Kazungula) • But significant exceptions • HH head >61 years were 39% less likely (Kazungula) • Male-headed (31-45 years) were more likely (Kalomo) • Married HH head more likely than divorced/separated (Kazungula) • HHs closest to main roads, schools, clinics more likely (all) 45

46. Impact Estimates 46

47. Impact Estimates – Welfare Impact on consumption expenditure unambiguously positive and statistically significant in all three districts, regardless of the wealth status Consumption effect was greatest on non-food items In Chipata, effect of SCTs on non-food consumption expenditure was 9.6 percent greater among asset poor households than it was among their asset non-poor counterparts 47

48. Impact Estimates – Investment • Impact of participation on value of small livestock was unambiguously positive and significant in the two rural schemes of Kalomo and Kazungula • Impact on investment in micro-enterprises was positive and significant in the urban-based scheme of Chipata • Program effects on value of livestock were greatest among asset poor households (Kalomo only) • Evidence of threshold effects on asset accumulation • Impact on asset accumulation positive and significant only among relatively non-poor households • Asset-poor households may require higher transfer levels • No discernible effect on cultivated land area in all three districts 48

49. Impact Estimates – Education • Impact on educational outcomes was mixed • Enrolment rates improved only among boys in Kalomo • Attendance rates improved for both male and female children in Chipata (“soft” condition of school attendance linked to payment of educational premium), regardless of asset wealth category • Also improved for asset poor households in Kalomo • In Kazungula, attendance rates improved only among girls in asset non-poor households 49

50. Summary and Conclusions • SCT impact • Unambiguously positive for household welfare • More pronounced for non-food items • Asset wealth matters only in urban scheme • Investment effects significant but varied by design and setting of scheme • Small livestock in rural schemes • Micro-enterprises in urban scheme with educational premiums • Threshold effects with respect to asset accumulation • Educational effects were mixed • Enrolment rates improved only among boys in Kalomo • Attendance improved unambiguously in scheme with attendance soft condition • Attendance effects more heterogeneous in rural schemes • In conclusion, SCTs have scored but could be improved • Some outcomes require more time, design adjustments • Need to recognize heterogeneity among eligibles - No one size could fit all! 50