Psychological Spillovers and Impact Heterogeneity in a Graduation Program

Study Context

Research shows that graduation programs can ameliorate deep-seated poverty (Banerjee et al., 2015). However, these programs are expensive, with half their cost due to the intensive beneficiary mentoring (designed to build confidence, self-efficacy, and other psychological assets), that many argue is the key to success of these programs. The impressive average treatment effects may also obscure substantial impact heterogeneity, with the most recent work showing that much of this impact heterogeneity emerges from differences in beneficiaries’ pre-treatment psychological state (Correa & Carter, 2021). This study aims to understand the role of psychological factors in an RCT Paraguayan graduation program (Tenondera) with the goal of making these programs more uniformly efficacious and more cost-effective.

Study Design

This study uses a variable saturation scheme that will allow to identify psychological and economic spillovers. 246 communities were randomly allocated to different saturation intensities. The two follow-up survey rounds will generate substantial random variation in the degree to which survey respondents have been exposed to neighbors participating in the graduation program. The study team will also collect social network data that will allow them to create an individual specific measure of exposure to psychological spillovers, which may add to the evidence on the longevity of graduation program impacts.

Results and Policy Lessons

Findings are preliminary and subject to further revision based on additional data analysis. Results are not yet available to be shared publicly.