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Innovations for Poverty Action (2014)

The Impact of Unconditional Cash Transfers on General Welfare in Kenya

Cash Transfers Welfare

Innovations for Poverty Action

Titre : The Impact of Unconditional Cash Transfers on General Welfare in Kenya

Région /Pays : Kenya

Date : 2014-2016

Providing cash grants to low-income households without any strings attached has been proven to have various benefits on the lives of those who receive the transfers, but less is known about how this sudden influx of income affects the local economy and people living nearby. In western Kenya, researchers evaluated the impact of unconditional cash transfers, provided by the organization GiveDirectly, on household well-being and local economic activity. The transfers led to large increases in consumption and assets for recipients, as well as large positive impacts on consumption for non-recipient households and revenue for firms. These results counter concerns that large cash transfers may harm those who do not receive them.

Previous research has found that providing unconditional cash transfers, or cash grants without any strings attached, to low-income households can led to positive welfare benefits for recipients, including increased income, improved psychological wellbeing, and greater empowerment for women.1 There is great interest in these types of programs, as many low- and middle-income countries have implemented unconditional cash transfers as a tool for poverty alleviation. Yet little is known about how the sudden influx of income from the transfers affects the local economy, including for those who do not receive the transfer. Does the injection of funds stimulate wider economic activity or change the price of goods ? Do the positive impacts experienced by transfer recipients spill over to non-recipients ? Or alternatively, are there economic or psychological consequences for non-recipients ?

Taille de l’échantillon  : 653 villages

Innovation for Poverty Action (IPA)

Page publiée le 9 septembre 2023