Policy Brief Issue 21 ARE CASH TRANSFERS BETTER CHUNKY OR SMOOTH? EVIDENCE FROM AN IMPACT EVALUATION OF A CASH TRANSFER PROGRAM IN NORTHERN NIGERIA GENDER Authors: Gautam Bastian, Markus Goldstein and Sreelakshmi Papineni INNOVATION LAB The Gender Innovation KEY MESSAGES Lab (GIL) conducts impact • Women receiving unconditional cash transfers in northern Nigeria evaluations of development interventions in Sub-Saharan worked more, particularly, in their own businesses, spent more on Africa, seeking to generate consumption, were more food secure, saved more, bought more evidence on how to close animals and improved their housing compared to the women in the the gender gap in earnings, control group. For example, females in the treatment group that received productivity, assets and cash transfers were 14% more likely to participate in the labor force than the agency. The GIL team is control group measured a few months after the last payments were made. currently working on over • Quarterly transfers cost half as much as monthly transfers to administer, 50 impact evaluations in 21 countries with the aim of but there is no difference in outcomes. Women were randomly assigned building an evidence base to receive the same total cash amount in 15 monthly installments or 5 quarterly with lessons for the region. installments. There is no statistical difference in consumption, investment, labor force participation or other key outcomes between women receiving The impact objective of GIL is monthly or quarterly installments. increasing take-up of effective policies by governments, • Women’s ability to control the cash transfers is the same under development organizations a quarterly payment scheme and monthly payment scheme. The and the private sector in order proportion of the cash retained by the female recipient herself wasn’t affected to address the underlying by the structure of the transfer, except for a small proportion of households causes of gender inequality where the quarterly recipients transferred slightly more to their husbands in the in Africa, particularly in terms event that he temporarily migrated for work. of women’s economic and social empowerment. The lab • Women use cash transfers to increase investment in their own business aims to do this by producing activities. Cash transfer recipients were not only more likely to be involved in and delivering a new body of their own non-farm business but they also spent more on business inputs and evidence and developing a increased their business profits. Their husbands remained active farmers and compelling narrative, geared didn’t change their business activities. towards policymakers, on what works and what does not work in promoting gender equality. http://www.worldbank.org/en/programs/africa-gender-innovation-lab Unconditional cash transfers are gaining popularity as SO WHAT TO DO ABOUT IT? an effective tool to foster economic development. A The World Bank’s Africa Gender Innovation Lab, in substantial body of research has emerged to provide collaboration with Catholic Relief Services (CRS), evidence-based guidance to policymakers on how to conducted an experiment that varied the size and optimally design cash transfer features such as transfer frequency of unconditional cash transfers delivered to size, timing, frequency and the choice of the main approximately 1,200 ultra-poor households in two local recipient.1 government areas of Kebbi state in northwest Nigeria bordering Niger and Benin. A total of 75,000 Nigerian One common empirical finding is that women Naira (roughly USD 693 PPP)4 were transferred over recipients are more likely to favor food and child- fifteen months to the female primary decision maker in oriented expenditures compared to men. 2 However, selected households by CRS through the USAID-funded a woman’s ability to control and handle the money Feed the Future Nigeria Livelihoods Project (FtFNLP).5 may depend on how large the payment is or when the payment is made. 3 The structure of the transfers HERE’S WHAT WE DID may matter: for example, smaller and more regular Baseline data was collected from 2,500 ultra-poor transfers may help smooth consumption and may households between April and June 2015. The households be easier to hide from others while larger and less were identified through a community-based poverty frequent transfers may encourage investment and assessment validated by a Progress Out of Poverty Index may be more visible to others. Larger and less (PPI) survey. In public lottery ceremonies, about ¼ of these frequent transfers would have lower administrative ultra-poor households were randomly assigned to receive overhead for the implementer, but might be ineffective 5,000 Naira cash every month for 15 months, another ¼ if households have highly irregular incomes or face were assigned to receive 15,000 Naira cash every quarter serious food insecurity. (5 installments over 15 months). The remaining ½ of the households received no cash transfers. Disbursement We set out to test these assumptions with an impact started in September 2015 to both monthly and quarterly evaluation of a cash transfer program in northern Nigeria treatment households and by March 2017 all recipient that varied disbursement structure. households had received 71,500 Naira in total.6 CASH TRANSFER PROGRAM TIMELIME Harvest Season Plenty/Dry Season Planting Season Eid Al Kabir Uhola - Zuru Cultural Festival Eid Al Fitri Eid Al Kabir Uhola - Zuru Cultural Festival Festivals 2015 2016 2017 SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY Payment 1 Payment 3 Payment 5 Payment 7 Payment 9 Payment 11 Payment 13 Payment 15 4000 NGN/ 4000 NGN 5000 NGN 5000 NGN/ 5000 NGN 5000 NGN 5000 NGN/ 5000 NGN 12000 NGN 15000 NGN 15000 NGN Payment 2 Payment 4 Payment 6 Payment 8 Payment 10 Payment 12 Payment 14 4000 NGN 4500 NGN/ 5000 NGN 5000 NGN 5000 NGN/ 5000 NGN 5000 NGN 14500 NGN 15000 NGN Figure 1 = quarterly payments were made = delays to payments 1 See ODI report: “Cash transfers: what does the evidence say?” (2016) for a good analysis of the cash transfers literature and how it fits with program design. 2 For a systematic review of the evidence see Yoong et al. (2012). 3 In the Philippines, Ashraf (2009) find that people allocate resources differently when they are more visible to others. 4 1 USD = 108.23 Naira at 2015 purchasing power parity for private consumption. Source: World Bank. 5 FtFNLP is an agriculture-led project in rural communities of northern Nigeria’s Sokoto and Kebbi states, and the Federal Capital Territory. It aims to help 42,000 poor households improve agriculture production, income, and child nutrition. 6 3,500 Naira were deducted over the first few payments to recover the cost of a mobile phone provided to cash transfer recipient households to facilitate mobile payments. We collected two rounds of follow-up data: in November 2016 (about 12 months into the program) and again in April SHARING OF THE CASH TRANSFER 2017 (shortly after the last transfers were completed). The BY THE FEMALE RECIPIENT follow-up surveys were collected from both female and male decision makers in the household. In this policy note we discuss the immediate impacts on households that 54% were offered cash transfers compared to the households of the cash who did not receive cash transfers. transfer kept by the female HERE’S WHAT WE FOUND Households in the study were in rural farming communities, with 90% of men engaged in agriculture or animal production. 26% 14% given to her given to At baseline, women were primarily engaged in household husband children work or childcare, with only 36% engaged in farming, 10% in business and 5% employed in wage labor. In-line with the 4% 2% shared with shared with program’s targeting criteria, 92% of the households earned friends and friends and less than the USD 1.90/day poverty line and the remaining famiy in the famiy in a same village different village households only slightly more. Approximately one fourth of the households were in polygamous marriages and most Figure 2 households practiced Islam. IMPACTS OF THE CASH TRANSFER SHARING OF THE CASH TRANSFER The impacts of receiving a cash transfer on consumption, The primary female decision maker in the household collected investment, well-being and production outcomes are the cash transfer, usually at the village chief’s palace, using presented below. These impacts are based on data reported an identification card. The cash transfers in FtFNLP did by the primary female decision maker in the household7. not come with conditions but since households were told by traditional leaders that the money was for the female, CONSUMPTION AND INVESTMENT: Daily per capita the content during the sensitization campaign could have adult-equivalent consumption is approximately 25% influenced the female’s ability to keep more of the cash. Since higher for households that received cash transfers.8 Food the payments were made in a common area in each village, security and dietary diversity of cash transfer households the amount and timing of the cash transfer were likely to also increased significantly. The consumption and be known by the woman’s household and to others in the nutrition impacts did not change substantially between village. Figure 2 shows the average proportion of the cash the two rounds of follow-up data collection. After all the transfer that the female recipient kept herself (54%) and the cash transfers were received, the value of animal stock proportion transferred to other people in and out of her home. owned by recipients was one and a half times the non- Receiving transfers monthly or quarterly made no recipients and the value of household assets was about significant difference in the proportion of the transfer 30% higher. Women recipients most often purchased retained by the women recipients. However, in the 5% of small animals like goats, sheep and chicken. This may households where the husband temporarily migrated for be because these were all that she could afford with the work, women receiving quarterly transfers shared a slightly amount of the cash transfer. However, it is also possible higher proportion of the cash transfer with her husband. A that the purchase of small animals offers an easy way larger quarterly payment could make the female feel more to liquidate cash transfers that could eventually be used obligated to share a higher proportion with others to deal as a savings mechanism in times of need. Only 30% of with one-off shocks since she has a higher capacity to help. women reported being involved in farming at follow-up, 7 The impacts on food and total expenditure outcomes reported by the primary male decision maker in dual-adult households do not statistically differ from the impact reported by the female. 8 The impacts on consumption and investment are calculated using ANCOVA estimation with single baseline and 2 follow-up surveys. and there is no change in expenditures on farming assets by women nor by their husbands who were much more active in farming. Cash transfer recipient households spent more on children’s clothing and health care than non-recipient households did but there were no differences in spending on school fees. Cash transfers were not spent on “temptation goods” like cigarettes and alcohol. FEMALE WELL-BEING AND BARGAINING POWER: Receiving cash transfers boosted recipients self-reported happiness and life satisfaction. However, once the cash transfers ceased, the differences in happiness between recipients and non-recipients disappeared. Cash recipients also spent a significantly higher amount on festivals and celebrations, which may help bolster their position in the community and grow their social capital. However, we found no conclusive evidence that a female’s bargaining power changed from receiving a cash transfer. We measured this by comparing the amount she could give a close relative with and without consulting her husband. PRODUCTION: Cash transfers significantly impact female employment, increasing the likelihood of being economically active by 14%. Women receiving cash transfers are 11% more likely to work in a nonfarm business, they purchase twice as much raw material for their businesses and their business profits are 80% higher. These women are most commonly engaged in petty trading, rice crop-processing and frying cakes for sale. Men largely continue to work in farming activity whether the household received a cash transfer or not. SMOOTH-MONTHLY VS. CHUNKY-QUARTERLY: Receiving cash transfers monthly or quarterly made no statistically significant difference on the impacts of the cash transfer.9 The only potential difference is the timing of acquiring animals: quarterly recipients owned a higher number of animals than monthly recipients at the time of the first follow-up survey but exhibited no difference in the second follow-up survey. During focus group discussions with female cash transfer recipients, the monthly recipients alluded to needing more time to save enough to afford to buy assets whereas the quarterly recipients had more liquidity to purchase assets right away. POLICY IMPLICATIONS Cash transfers offered to ultra-poor households in northwest Nigeria have an immediate positive impact on household consumption, female employment and well-being. Monthly cash transfer payments cost twice as much to deliver as quarterly payments, once all the fixed and variable costs of delivery are accounted for. Since less-frequent and larger-value transfers are just as effective FOR MORE INFORMATION, as more frequent transfers, program implementers could significantly lower the PLEASE CONTACT cost of delivering cash transfers by transitioning to less-frequent transfers. This could potentially free up resources to increase the number of recipients or the Markus Goldstein size of the transfers. mgoldstein@worldbank.org Rachel Coleman 9 The average length between “monthly” payments was 39 days, and “quarterly” payments was 109 days. rcoleman1@worldbank.org This work has also been funded in part by the United States Agency for International Development (USAID) and the Umbrella Facility for Gender Equality (UFGE), a World Bank Group multidonor trust fund expanding evidence, knowledge and data needed to identify and address key gaps between men and women to deliver better development 1818 H. St NW solutions that boost prosperity and increase opportunity for all. The UFGE has received generous contributions from Australia, Canada, Denmark, Finland, Germany, Iceland, Netherlands, Norway, Spain, Sweden, Switzerland, United Washington, DC 20433 USA Kingdom, and the United States. We thank Paula Gonzalez Martinez, Olubunkola Osinibi, Marietou Sanogo and Oluwatoyin Zakariya for superb research and field assistance.