Cash Transfer Evaluation in Liberia

Study Context

Led by Jon Robinson, Jenny Aker, and Alan Spearot, in partnership with USAID and GiveDirectly, researchers are designing a randomized evaluation (RCT) to develop estimates of the cost effectiveness of digital cash transfers of multiple sizes on a wide range of development outcomes relevant to USAID in Liberia. The aim of this exercise is to measure the impact of cash transfers in Liberia. This impact may be compared to current and future USAID programming in Liberia.

Study Design

The evaluation is of a randomized cash transfer program with households in 300 villages in Malawi. The value of the transfer was large, averaging $500 (randomly varied between $250, $500, and $750), which is equivalent to about 86% of estimated annual household average expenditure in Liberia. The team implemented bi-monthly panel phone surveys with 20% of the sample (spanning the universe of sampled villages) that collected data on a number of outcomes. outcomes. The analysis focused on four outcomes that were pre-specified and which were measured in both phone and in-person surveys: food security, expenditures, income, and transfers. The team supplemented the phone surveys with an in-person endline survey administered about 18-25 months after cash had been disbursed, which measured the outcomes listed above as well as other key pre-specified outcomes, including psychological well-being, assets and wealth, intimate partner violence (IPV), household resilience, and agricultural input usage.

Results and Policy Lessons

Food security increased by 0.3 standard deviations for the first few months after disbursement and the treatment effect did not attenuate over time. Food expenditures did not increase post-disbursement, but researchers do reveal some increases in nonfood expenditures. The analysis reveals no effect on non-agricultural income. Researchers observed little effect on transfers sent at any point amounting to only a few dollars. At endline, the study found no effect on expenditures, transfers, or income, but did find lasting effects on food security. The study also found that the cash transfers have substantial and significant improvements on other economic and psychological measures of well-being. Non-land wealth increased by 25-30%, psychological well-being improved by 0.1-0.3 SD, and households’ resilience to shocks improved by 0.1 SD, intimate partner violence decreases by 8 percentage points. The team also documents a sizable reduction in households’ likelihood of being employed as a casual laborer and an associated decrease in casual labour hours. The analysis shows significant improvement in education for children: households report that more children are enrolled, that they spent more on education, and that children missed fewer days of school.