The impacts of productive conditional cash transfers on households in Nicaragua

Basic CCT: Households received bimonthly transfers ($145 + $90 for each eligible child). The transfer was conditional on regular preventative health check-ups for children younger than age of 7, however in practice this was not monitored. Households with children between 7 and 15 received and an additional smaller transfer conditional on their children's school enrolment ($25).

CCT + Lump Sum Grant: In addition to the basic CCT, households in this group had received a productive investment grant - intended to encourage recipients to start a small non-agricultural business and diversify their income ($175) . This grant was conditional on the household developing a business development plan. Beneficiaries received technical assistance to develop the business plan and also participated in business-skills training workshops organized in their own communities.

CCT + Vocational Training: In addition to the basic CCT, households in this group received a scholarship that allowed one family member to attend a vocational training course. However, at the time of follow-up data collection, vocational training courses had not yet started.

The programme also put in place a system of local promotoras (leaders) to enhance information flows and compliance with program requirements further. The promotoras met frequently with a small groups of (about 10) beneficiary women to talk about these requirements and the program's objectives.

2005-11-01

2006-12-31

Consumption, Income, Labor participation (non-agricultural), Distribution of child labor, Child health, Child development

The Atención a Crisis program was a one-year pilot program implemented between November 2005 and December 2006 by the Ministry of the Family in Nicaragua. The program presented households with cash transfers serve as a short-run safety net and promote long run upward mobility and poverty reduction through asset creation and income diversification. Households either received basic bimonthly cash transfers, or transfers plus vocational training or a lump-sum grant.

Lottery

Community level and individual level

Yes

106 communities

4,245 households

56 treatment communities, 50 control communities

Cash transfer programs have become extremely popular in the developing world. A large literature analyzes their effects on schooling, health and nutrition, but relatively little is known about possible impacts on child development. This paper analyzes the impact of a cash transfer program on early childhood cognitive development. Children in households randomly assigned to receive benefits had significantly higher levels of development nine months after the program began. There is no fade-out of program effects two years after the program ended. Additional random variation shows that these impacts are unlikely to result from the cash component of the program alone.

Macours, Karen, Norbert Schady, and Renos Vakis. 2012. "Cash Transfers, Behavioral Changes, and Cognitive Development in Early Childhood: Evidence from a Randomized Experiment." American Economic Journal: Applied Economics 4(2): 247-273.

https://www.povertyactionlab.org/sites/default/files/publications/426%20Early%20Childhood%20CCT%20April%2012.pdf

This paper analyzes changes in the allocation of child labor within the household in reaction to exogenous shocks created by a social program in Nicaragua. The paper shows that households that randomly received a conditional cash transfer compensated for some of the intra-household differences, as they reduce child labor more for older boys who used to work more and for boys that were further behind in school. The results also show that households that randomly received a productive investment grant targeted at women, in addition to the basic conditional cash transfer benefits, show an increased specialization of older girls in nonagricultural and domestic work, but no overall increase in girls’ child labor. The findings suggest that time allocation and specialization patterns in child labor within the household are important factors to understand the impact of a social program.

Del Carpio, Ximena V. and Karen Macours 2010. "Leveling the Intra-Household Playing Field: Compensation and Specialization in Child Labor Allocation." Child Labor and Transition Between School and Work, Research in Labor Economics. Volume 31, 259-295.

https://www.povertyactionlab.org/sites/default/files/publications/577%20labor%20allocation%20June09.pdf

This article analyses the role of interactions with local leaders in amplifying poor households' investment response to a social programme. The causal effect of social interactions is identified through the randomised assignment of leaders and other beneficiaries to three different interventions aimed at increasing human capital and productive investments. Social interactions are found to augment programme impacts on households' investments in education, nutrition and income-generating activities and to affect households' attitudes towards the future.

Macours, Karen, and Reno Vakis. 2014. "Changing Households' Investment Behaviour through Social Interactions with Local Leaders: Evidence from a Randomised Transfer Programme." The Economic Journal 124(May): 607-633.

http://onlinelibrary.wiley.com/doi/10.1111/ecoj.12145/pdf

While climate change is likely to increase weather risks in many developing countries, there is little evidence on effective policies to facilitate adaptation. This paper presents experimental evidence on a program in rural Nicaragua aimed at improving households’ risk management through income diversification. The intervention targeted agricultural households exposed to weather shocks related to changes in rainfall and temperature patterns. Households received either a basic conditional cash transfer, or the same CCT plus a productive intervention: a vocational training or a productive investment grant. We identify the relative impact of each of the three packages based on randomized assignment, and analyze how impacts vary by exposure to exogenous drought shocks. The results show that both packages that included a productive intervention provided protection against drought shocks two years after the end of the program. Households that received the productive investment grant also had higher average consumption levels. The complementary interventions led to diversification of economic activities and better protection from shocks compared to both beneficiaries of the basic conditional cash transfer and control households. These results show that combining safety nets with productive interventions can help households manage future weather risks and promote longer-term program impacts.

Macours, Karen, Patrick Premand, and Renos Vakis. "Transfers, Diversification and Household Risk Strategies: Experimental Evidence with Lessons for Climate Change Adaptation." Working Paper, Paris School of Economics, July 2012.

https://www.povertyactionlab.org/sites/default/files/publications/427_428%20CCTs%20for%20Weather%20Shocks%20July2012.pdf

Numerous evaluations show that conditional cash transfer programs change households’ investments in their young children, but there are many open questions about how such changes can be sustained after transfers end. This paper analyzes the role of social interactions with local female leaders for sustaining program impacts. The social interactions are identified through the randomized assignment of leaders and other beneficiaries to different cash transfer packages. Random exposure to leaders that received the largest package was found to augment short-term program impacts on households’ investments in education and nutrition, and to affect households’ attitudes towards the future during the intervention. This paper shows that the strong social multiplier effects from leaders’ treatment persisted two years after the end of the program. Households randomly exposed to female leaders with the largest package sustained higher investments in their children and reported higher expectations and aspirations for the future of their children. These results suggest that program design features that enhance ownership of a program’s objectives by local leaders may shift other beneficiaries’ norms and sustain higher levels of human capital investments.

Macours, Karen and Renos Vakis, 2016. "Sustaining Impacts When Transfers End: Women Leaders, Aspirations, and Investment in Children", NBER working paper w22871

http://www.nber.org/papers/w22871