The selection and distortion effects of unconditional and conditional cash transfers: Evidence from seasonal migration in Indonesia

Last registered on June 06, 2018

Pre-Trial

Trial Information

General Information

Title
The selection and distortion effects of unconditional and conditional cash transfers: Evidence from seasonal migration in Indonesia
RCT ID
AEARCTR-0003045
Initial registration date
June 05, 2018

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
June 06, 2018, 4:30 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Region

Primary Investigator

Affiliation
Yale University

Other Primary Investigator(s)

PI Affiliation
Stanford University
PI Affiliation
Yale University
PI Affiliation
The University of Sydney
PI Affiliation
London School of Economics

Additional Trial Information

Status
Completed
Start date
2017-07-12
End date
2018-01-20
Secondary IDs
Abstract
In many regions of the world that are heavily depend on rainfed agriculture, the rural-to-urban wage gap peaks in the lean season. As a lean season strategy, seasonal rural-to-urban labor migration is deployed by some households as a coping strategy. We experimentally test constraints to seasonal migration by randomizing 775 eligible, poor households in rural West-Timor, Indonesia, to either an unconditional cash transfer (UCT) or a cash transfer conditional on migration (CCT). The CCT group received information about seasonal migration possibilities in the form of a leaflet. To impose the conditionality in the CCT group, the second half of the transfer for the CCT was paid out at the destination. The CCT group was further split into three groups: (1) a `High’ (CCT High) treatment of IDR. 150,000 upon accepting the offer, and IDR 150,000 at the destination; a (2) a `Low (CCT Low) treatment of IDR 75,000 at the origin and IDR 75,000 at the destination; and (3) a `Low + surprise’ (CCT Low+) treatment of IDR 75,000 at the origin and IDR 225,000 at the destination. At the offer stage, the CCT Low and CCT Low+ are told that their second disbursement is IDR 75,000, so the CCT Low+ are `surprised’ with the larger transfer at the destination. The UCT treatment arm receives IDR 150,000 in one disbursement at the origin.

The main outcome is household income at the height of the migration season. The CCT offer is expected to be accepted by a lower share of households than the UCT, but to increase migration compared to the UCT. Hence the intent-to-treat effects of CCT assignment provides evidence not only on the benefits of migration and the need for information and nudges to encourage it, but also on the cost-effectiveness of the CCT and UCT treatments, given their different take-up rates. Going by migration season household income, we find the CCT treatments to compare favorably to the UCT in terms of the ratio of benefits to costs. The comparison between CCT Low and CCT High provides evidence on whether size of the CCT Low transfer is large enough to relax the migration constraint, whereas the comparison between CCT High and CCT Low+ provides the best estimate of selection into migration. Specifically, the CCT High may induce additional households to send migrants with lower marginal gains to migration (lower comparative advantage in the migration sector as compared to the CCT Low+), which would indicate distortion. We indeed find that the CCT Low and CCT Low+ arms induce slightly fewer people to migrate than the CCT High, but to have higher intent-to-treat impacts on income than CCT High. This evidence of selection implies that there is an optimum transfer size beyond which distortionary effects outweigh marginal benefits to the recipients.
External Link(s)

Registration Citation

Citation
, et al. 2018. "The selection and distortion effects of unconditional and conditional cash transfers: Evidence from seasonal migration in Indonesia." AEA RCT Registry. June 06. https://doi.org/10.1257/rct.3045
Former Citation
, et al. 2018. "The selection and distortion effects of unconditional and conditional cash transfers: Evidence from seasonal migration in Indonesia." AEA RCT Registry. June 06. https://www.socialscienceregistry.org/trials/3045/history/30407
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2017-07-12
Intervention End Date
2018-01-20

Primary Outcomes

Primary Outcomes (end points)
Household income, food security
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Eligible households are randomized into four groups. Households in one of these groups are offered unconditional cash transfer (UCT), and households in the other three groups are offered a conditional cash transfer (CCT) conditional on migration. The CCT group received information about seasonal migration possibilities in the form of a leaflet. To impose the conditionality in the CCT group, the second half of the transfer for the CCT was paid out at the destination. The CCT group was further split into three groups: (1) a `High’ (CCT High) treatment of IDR. 150,000 upon accepting the offer, and IDR 150,000 at the destination; a (2) a `Low (CCT Low) treatment of IDR 75,000 at the origin and IDR 75,000 at the destination; and (3) a `Low + surprise’ (CCT Low+) treatment of IDR 75,000 at the origin and IDR 225,000 at the destination. At the offer stage, the Low and Low+ are told that they will receive IDR 75,000, so the CCT Low+ are `surprised’ with the larger transfer at the destination. The UCT treatment arm receives IDR 150,000 in one disbursement at the origin.
Experimental Design Details
Randomization Method
Randomization done in advance in office by a computer.
Randomization Unit
Household
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
5 villages
Sample size: planned number of observations
Actual number of eligible households: 775
Sample size (or number of clusters) by treatment arms
Actual number of eligible households assigned to each treatment arm: CCT High 202, CCT Low 157, CCT Low+ 167, UCT 249.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials