The Dynamic Effects of Cash Transfers to Agricultural Households
Working Paper 32431
DOI 10.3386/w32431
Issue Date
While cash transfers will tautologically increase contemporaneous consumption, it is unclear whether these gains will persist, especially in rural agricultural settings with limited productive investment opportunities. Using bi-monthly survey data from recipients of a large, unconditional cash transfer in Liberia and Malawi, we document sustained food security improvements until 1.5-2 years after disbursement, driven by increased farm investments and production. We additionally document reductions in casual off-farm labor, increases in psychological well-being and, in Liberia, a decline in IPV. We find similar increases in harvest output across different transfer sizes. Those receiving larger transfers spend more on housing and durables.