An Anti-poverty “Graduation” program gave over 20,000 participants a one-time asset transfer, often providing people with animals, such as cows or chickens, from which they could earn income. It supplemented that asset donation with temporary spending support; training on running a business; frequent home visits from project staff; and information about health care. Participants were also encouraged to save money.
Some specifics were tailored to each country, but in each case, participants’ results were compared to those of people with similar income levels who did not take part in the project. The wealth gains were observed in five of the six countries; only Honduras was an exception.
Overall, with more than 20,000 people enrolled across six countries over a three-year period, the experiment produced a 5 percent increase in per capita income, an 8 percent increase in food consumption, a 15 percent increase in assets, and a 96 percent increase in savings, compared with similar groups of people not enrolled in the program.
It supplemented that asset donation with temporary spending support; training on running a business; frequent home visits from project staff; and information about health care. Participants were also encouraged to save money.
“The results show that three years after the intervention, hunger is down, consumption is up, and income is up,” says Abhijit Banerjee, the Ford Professor of International Economics at MIT, and a co-author of the paper detailing the findings.
The “Graduation” program was targeted at substantial groups of very poor citizens in Ethiopia, Ghana, Honduras, India, Pakistan, and Peru; about 48 percent of households in the experiment had daily per capita consumption of less than $1.25. While the welfare of recipients was expected to increase in the short run, those gains proved durable.
“It seems to be an improvement that happens and stays intact,” Banerjee says, noting that the self-reported mental health of participants improved as well: “They are happier, too.”
Other anti-poverty papers by Banerjee
SOURCES – MIT, Journal Science