The Welfare Effects of Beneficiary Control over the Timing of Cash Transfers

Study Context

Cash transfers effectively reduce poverty and improve psycho-emotional and cognitive outcomes (see Beegle et al. (2018) and Ridley et al (2020), respectively, for reviews), but their impacts vary with programmatic factors like timing, frequency, and size (Kansikas et al, 2023; Haushofer and Shapiro, 2018). Recent research highlights the significance of these factors in addressing constraints such as the inability to save and invest, be productive, myopia, mental health and cognition, and limited access to insurance and credit. The research team will study the effects of all three of these factors on psycho-emotional and cognitive outcomes in Malawi, where 70% of the population experiences multidimensional poverty, 51% are food-insecure, and majority are engaged in rain-fed agriculture (National Statistical Service, 2021).

Study Design

Working with GiveDirectly Malawi in 210 villages with 10 households per village, the study team will randomize the ability of the households in half of the villages to choose any distribution of a 500USD cash transfer across the next 12 calendar months, subject to the total budget constraint and a minimum increment of 5USD. They will have time to plan before deciding. The team will compare this treated group to a control group that will receive the current GiveDirectly model (500 USD one month after enrollment) and measure effects on: depression (PHQ-9), anxiety (GAD-7), self-esteem (Rosenburg scale), cognition (digit span forwards and backwards), time preferences, and risk preferences in addition to consumption, employment, assets, savings, debt, food security, and negative coping strategies (e.g., going hungry). We will also measure recipients’ willingness to accept (WTA) for switching from their preferred timing to the current GiveDirectly model and compare this ex-ante measure of welfare to the ex-post measures of mental health and coping strategies.

Results and Policy Lessons

Results forthcoming.