Customized Cash Transfers: Financial Lives and Cash-flow Preferences in Rural Kenya
We examine the preferences of low-income households in Kenya over the structure of unconditional cash transfers. We find, first, that most preferred lumpy transfers, and some preferred deferred receipt—unlike the structures typical of safety-net programs, but consistent with evidence on the financial challenges of poverty. Second, modest deferral of transfers increased income 1.5 years later. Finally, small changes in cash flow around the time of decision-making about transfer structure affected demand for deferral, with large downstream consequences. Taken together, these results illustrate how adapting cash transfer design to the decision-making environment of those in poverty could improve financial choices and outcomes.
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