The Welfare Effects of Beneficiary Control over the Timing of Cash Transfers

To exit poverty, income streams of low-income individuals 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 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 GiveDirectly (GD). 

First, the researchers will elicit beneficiary preferences over preferred times and amounts of cash transfers and measure the willingness to accept GiveDirectly’s default timing instead (a lump-sum a month after enrollment). Then, they will use a randomized trial with the following arms: (1) lump-sum transfers (GD’s default schedule); (2) smooth (equal), monthly transfers (a popular, alternative schedule in practice); and (3) fully-flexible payment schedule that provides choice over the timing of transfers to assess impacts on consumption expenditures, income, assets, spillovers, women’s empowerment, and mental health. The researchers will further explore whether liquidity or insurance drives these impacts by stratifying treatments on village “financial health.” 

RFP Cycle:
RFP 2 (Spring 2023)
Location:
Malawi
Researchers:
Type:
  • Full project