The Effects of Cash Transfers on Social Preferences

This research project is interested in better understanding how cash transfers shape social preferences in the East African context. Specifically, we are interested in how cash transfers impact the children of the recipients with regard to their social preferences. We will do this by conducting lab-in-the-field experiments among participants of a previously implemented RCT that provided unconditional cash transfers to poor households in Kenya. In 2017–2018, the Busara Center for Behavioral Economics delivered UCTs to a randomly chosen group of households (n = 540) in a randomly chosen group of 60 villages. The households neighboring those which received the cash transfers comprised the spillover group (n = 1,077), while 60 nearby villages in which nobody received cash transfers comprised the pure control group (n = 1,545).

2021-04-12

2021-09-30

Participants’ children in each of the three groups (treatment, spillover, and pure control) will be surveyed and will complete several economic games. The surveys will measure self-reported social behavior, with modules measuring specifically trust, envy, depression, social norms, social ties, perceptions about sharing and redistribution, locus of control, and IQ. The games will be standard economic games that have been modified to be appropriate for children. In the games, the children will get limited information on the other player, namely their age and gender. In some rounds of the games, children will also know the other player’s family household wealth relative to their own family’s wealth. By comparing the behaviors of the children across the three groups, we are able to assess how cash transfers to parents affect children’s prosocial behavior. And by comparing the behaviors within-child across different kinds of partner identities, we are able to assess how prosocial behavior depends on the current distribution of wealth.
In addition, we will resurvey adults, asking them questions about asset ownership, household consumption, and individual well-being. These questions will allow us to assess the persistence of the cash transfers impact on these outcomes for each of the children’s households.

We describe the analysis plan for a lab-in-the-field study that will examine the effects of unconditional cash transfers on children’s social preferences. The study will be conducted with children living in Nakuru County, Kenya whose parents participated in a previously implemented RCT that provided cash transfers to poor households. Participating households either received a cash transfer, did not receive a transfer but lived in the same village as those who did, or did not receive a transfer and lived in a village in which nobody received a transfer. Participants will be surveyed and will complete several standard economic games measuring their social preferences. For these tasks, they will be paired with individuals of varying relative wealth to assess their social preferences and how social preferences vary with the identity of the other player.

Randomization was completed by the previous study for the Unconditional Cash Transfer treatment (Haushofer,Johannes, Robert Mudida, and Jeremy P Shapiro, “The Comparative Impact of Cash Transfers and a Psychotherapy Program on Psychological and Economic Well-being,” NBER Working Papers, 2020.). Randomization for the lab experiments (e.g. characteristics of the other player) are randomized by a tablet.

The treatment from Haushofer, Mudida, and Shapiro (2020) was randomized at the village level. We randomize for each game a child plays the characteristics of the other player.

No

120 villages

We aim to visit 4,424 children within our target age range of 6 years old to 17 years old in 1,804 households. This will correspond to 906 children in the treatment households, 1,446 children in the spillover households, and 2,072 children in the pure control households.

We aim to visit 4,424 children within our target age range of 6 years old to 17 years old in 1,804 households. This will correspond to 906 children in the treatment households, 1,446 children in the spillover households, and 2,072 children in the pure control households.

The Effects of Cash Transfers on Social Preferences

We study the effects of an unconditional cash transfer program on social preferences
of children. The program allocated $1,076 to randomly selected households in rural Kenya. We
measure the social preferences of 4,022 children from 1,687 households with survey questions
and incentivized behavioral games three years after the intervention. We distinguish between
the direct effects on children of recipient households and the spillover effects on children of
neighboring households. We do not find consistent evidence that children from treatment and
spillover groups are more or less prosocial than children from the control group. Additionally,
we find no persistent economic effects of the program. We find some evidence of reduced
psychological well-being among adults and children in spillover households.

Haushofer, Larreboure, Lowes, Mait (2023). Cash Transfers and Social Preferences of Children.

https://www.nber.org/papers/w31720