Do Cash Transfers Foster Resilience? Evidence from Rural Niger
Policy makers are increasingly interested in strategies to promote resilience and mitigate the effects of future climatic shocks. Cash transfer programs have had widely documented positive welfare impacts. They often also aim to offer protection ag...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/281821605039063267/Do-Cash-Transfers-Foster-Resilience-Evidence-from-Rural-Niger http://hdl.handle.net/10986/34774 |
| Summary: | Policy makers are increasingly
interested in strategies to promote resilience and mitigate
the effects of future climatic shocks. Cash transfer
programs have had widely documented positive welfare
impacts. They often also aim to offer protection against
shocks, but their role in fostering resilience has been less
studied. This paper assesses whether the beneficiaries of a
multiyear government cash transfer program in rural Niger
are better able to mitigate the welfare effects of drought
shocks. It analyzes mechanisms through which cash transfers
contribute to resilience, such as savings facilitation,
asset accumulation, or income smoothing in agriculture and
off-farm activities. It combines household survey data
collected as part of a randomized control trial with
satellite data used to identify exogenous rainfall shocks.
The results show that cash transfers increase household
consumption by about 10 percent on average. Importantly,
this increase is mostly concentrated among households
affected by drought shocks, for whom welfare impacts are
larger than transfer amounts. Cash transfers increase
savings. They also help households protect earnings in
agriculture and off-farm businesses when shocks occur. Few
differences in household durables or livestock are observed.
Overall, these findings suggest that cash transfer programs
targeting poor households can foster resilience by
facilitating savings and income smoothing. |
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