In an interview with CBS San Francisco, Faculty Director Ted Miguel discusses his study on cash transfers to rural households in Kenya. Miguel found that these transfers resulted in positive effects for both poor households and the economy.
“A new study carried out in rural Kenya shows giving cash to the poor is the best way to help someone break the cycle of poverty; a study that could have implications for action in the Bay Area.
“In our case, trusting the poor to spend money on what’s best for them worked very well,” said Ted Miguel, one of the study’s lead authors and Faculty Director for the Center for Effective Global Action at UC Berkeley.
Miguel has been visiting rural Kenya for two decades now. During his most recent trip his team gave poor Kenyans $1,000 in cash and saw a stimulus.
“There’s been a fear that providing cash, you would give it to poor households that would spend it in unwise ways, that they would buy alcohol drugs or gamble it away we didn’t find any evidence of that,” Miguel said.
He found most Kenyans spent the money on food, home improvements and education for their children, and every dollar spent grew 2.5 times in the local economy.”
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