Abstract
To exit poverty, income streams of the poor must align with their liquidity needs (e.g., large investments, consumption-smoothing, saving for shocks, and smaller expenses). Traditional cash transfer programs lack flexibility, offering only fixed payment structures. This project will measure the demand for, and the welfare impacts of, the choice of a fully flexible payment schedule (times and amounts) in partnership with the Government of Ghana's Livelihood Against Poverty Program (LEAP). First, we will elicit beneficiary preferences over preferred times and amounts of cash transfers and measure the willingness to accept the LEAP default timing instead (smooth, equal, bi-monthly transfers). Second, we will use a randomized trial with the following distribution programs (equal in total value): (1) smooth, bi-monthly transfers (LEAP default) vs. (2) lump-sum transfers vs. (3) fully-flexible payment schedule that provides choice over the timing of transfers to assess impacts on subjective well-being (Benjamin et al 2014), consumption expenditures (we will use this to derive marginal utility of expenditures (MUEs) following Ligon (2020) and the treatment’s welfare effects), income, assets, savings and debt, women’s empowerment, and mental health. We will further explore whether liquidity or risk drives these impacts by stratifying treatments on village “financial health” (low, medium, high) (Innovations for Poverty Action IPA 2020). After evaluating the main effects at endline by comparing the lump-sum, bi-monthly, and fully-flexible programs, we plan to later implement a mechanism experiment to causally test whether the main effects are explained by either (i) commitment and self-control motive (full flexibility + free savings product) or (ii) consumption self-insurance motive (full flexibility + free insurance product).