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FEATURE STORY

Cash Transfers—An Incentive to Thrive...

May 25, 2011


A GAP-funded cash transfer experiment in Malawi seems to have resulted in higher levels of school enrollment and learning, lower teenage pregnancy and marriage rates, and improved mental health among participants.

In order to establish whether cash incentives can enhance female well-being, this two-year experiment took place in the Zomba district of Southern Malawi. In broad terms, it aimed to analyze the impact of cash incentives on the rates of female school enrollment, teenage pregnancy and marriage, and risky sexual behaviors. In more practical terms, the experiment involved providing direct cash transfersto households with women between the ages of 13 and 22 who had never been married.

To compare the effectiveness of diverse methods of treatment, the experiment featured both conditional and unconditional approaches. The young women who were treated conditionally were required to attend school regularly (CCT arm). In addition, separate money transfers were made to them and their parents or guardians. In contrast, those who received the unconditional cash transfers received the same amount of funding, but were not obliged to adhere to any specific guidelines, such as school attendance (UCT arm).

Results:
Enrollment

  • While enrollment improved in both the CCT and the UCT arm compared to the control group, the increase in enrollment was approximately 2.5 times larger in the CCT than the UCT arm.
  • Among those enrolled in school, attendance also improved in the CCT arm, while no significant improvement was detected in the UCT arm.
  • Similarly, test scores in mathematics, English reading comprehension, and cognitive skills improved significantly in the CCT arm, but no significant improvements occurred in the UCT arm.
  • It is fair to conclude that the CCT arm outperformed the UCT arm in improving schooling outcomes.

Teen marriage and pregnancy

  • The likelihood of being ever married or having started childbirth was unchanged in the CCT arm compared with the control group. However, there were large and statistically significant reductions in these outcomes in the UCT arm, entirely due to the impact of cash transfers among those who dropped out of school after the start of the intervention.
  • The results suggest that there are trade-offs to implementing CCTs instead of UCTs. Therefore, it is important to clearly define the target population and the primary aim of cash transfer programs from the outset to be able to design the most effective intervention.

Mental Health

  • The project recorded significant improvements in the mental health of the girls in both groups over the two-year period, although this improvement was larger in the UCT arm. The effects on mental health were not lasting, however. The positive impact of the program subsided quickly after the cash payments stopped.

Scaling Up

This year, the Adolescent Girls Initiative, which currently covers five low-income and post-conflict countries, will expand to Haiti and Yemen. These new additions to the AGI will benefit from the research carried out in Malawi—i.e., these programs will include cash-transfer components to ensure that the women involved will not be penalized for spending time in training and completing their education.

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