IDEAS home Printed from https://ideas.repec.org/p/ags/aaea16/235474.html
   My bibliography  Save this paper

Long-term Impacts of Poverty Programs: A Local-economy Cost-benefit Analysis of Lesotho's Child Grants Programme

Author

Listed:
  • Gupta, Anubhab
  • Taylor, J. Edward
  • Davis, Benjamin
  • Luca, Pellerano
  • Ousmane, Niang

Abstract

This study quantifies the long-run impacts of Social Cash Transfers (SCTs) and carries out the first ever (to our knowledge) long-run cost-benefit analysis of a SCT program. The impacts of SCTs include socio-economic and productive outcomes in beneficiary households as well as the economic spillovers that result from linkages between beneficiaries and non-beneficiaries within local economies. Using data from the PtoP impact evaluation of Lesotho’s Child Grants Program (CGP), we parameterize a cost-benefit model and estimate costs and benefits for both beneficiary and non-beneficiary households. The long-run benefits accruing to beneficiary households include the transfers themselves, plus a future stream of returns from human, physical and social capital formation stimulated by the program. These income gains, in turn, generate income multipliers in treated economies. We use unique panel data from Lesotho to model capital formation within treated households, together with the effect of this capital on household income. Then we link the cost-benefit model for CGP beneficiaries with a local economy-wide impact evaluation (LEWIE) model. We find that the discounted future stream of benefits from the CGP substantially exceed the program’s costs in the village clusters initially included in the program. The CGP produces 42.11 million Lesotho loti (LSL) in discounted benefits over a ten-year period, compared to a total discounted program cost of 22.38 million LSL.

Suggested Citation

  • Gupta, Anubhab & Taylor, J. Edward & Davis, Benjamin & Luca, Pellerano & Ousmane, Niang, 2016. "Long-term Impacts of Poverty Programs: A Local-economy Cost-benefit Analysis of Lesotho's Child Grants Programme," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235474, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea16:235474
    DOI: 10.22004/ag.econ.235474
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/235474/files/Long-term%20Benefits%20of%20SCTs%20AAEA_AG.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.235474?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66(4), pages 281-281.
    2. Sadoulet, Elisabeth & Davis, Benjamin & de Janvry, Alain, 2001. "Cash transfer programs with income multipliers," FCND briefs 99, International Food Policy Research Institute (IFPRI).
    3. Sadoulet, Elisabeth & Janvry, Alain de & Davis, Benjamin, 2001. "Cash Transfer Programs with Income Multipliers: PROCAMPO in Mexico," World Development, Elsevier, vol. 29(6), pages 1043-1056, June.
    4. Esther Duflo, 2001. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," American Economic Review, American Economic Association, vol. 91(4), pages 795-813, September.
    5. Mateusz J. Filipski & J. Edward Taylor & Karen E. Thome & Benjamin Davis, 2015. "Effects of treatment beyond the treated: a general equilibrium impact evaluation of Lesotho's cash grants program," Agricultural Economics, International Association of Agricultural Economists, vol. 46(2), pages 227-243, March.
    6. Taylor, J. Edward & Filipski, Mateusz J., 2014. "Beyond Experiments in Development Economics: Local Economy-wide Impact Evaluation," OUP Catalogue, Oxford University Press, number 9780198707882.
    7. J. Edward Taylor & Antonio Yunez-Naude, 2000. "The Returns from Schooling in a Diversified Rural Economy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 287-297.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Furio C. Rosati, 2022. "Can cash transfers reduce child labor?," IZA World of Labor, Institute of Labor Economics (IZA), pages 293-293, February.
    2. Schmook, Birgit & Vance, Colin, 2009. "Agricultural Policy, Market Barriers, and Deforestation: The Case of Mexico's Southern Yucatn," World Development, Elsevier, vol. 37(5), pages 1015-1025, May.
    3. Dammert, Ana C. & de Hoop, Jacobus & Mvukiyehe, Eric & Rosati, Furio C., 2018. "Effects of public policy on child labor: Current knowledge, gaps, and implications for program design," World Development, Elsevier, vol. 110(C), pages 104-123.
    4. Yasser Razak Hussain & Pranab Mukhopadhyay, 2023. "How Much do Education, Experience, and Social Networks Impact Earnings in India? A Panel Data Analysis Disaggregated by Class, Gender, Caste and Religion," SAGE Open, , vol. 13(4), pages 21582440231, December.
    5. Yi, Fujin & Sun, Dingqiang & Zhou, Yingheng, 2015. "Grain subsidy, liquidity constraints and food security—Impact of the grain subsidy program on the grain-sown areas in China," Food Policy, Elsevier, vol. 50(C), pages 114-124.
    6. Winters, Paul & Davis, Benjamin & Corral, Leonardo, 2002. "Assets, activities and income generation in rural Mexico: factoring in social and public capital," Agricultural Economics, Blackwell, vol. 27(2), pages 139-156, August.
    7. Nikolov, Plamen & Jimi, Nusrat & Chang, Jerray, 2020. "The Importance of Cognitive Domains and the Returns to Schooling in South Africa: Evidence from Two Labor Surveys," Labour Economics, Elsevier, vol. 65(C).
    8. Chitiga, Margaret & Tiberti, Luca & Maisonnave, Helene & Hoareau, Stephane & Robichaud, Véronique & Mabugu, Ramos & Ngandu, Stewart, 2012. "Analysis of the Economic Impacts of the South African Child Support Grant Via A Microsimulation-CGE Model," Conference papers 332237, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Valsecchi, Michele, 2014. "Land property rights and international migration: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 110(C), pages 276-290.
    10. David Roodman, 2022. "Schooling and Labor Market Consequences of School Construction in Indonesia: Comment," Papers 2207.09036, arXiv.org, revised Mar 2024.
    11. Laure Latruffe & Sophia Davidova & Elodie Douarin & Matthew Gorton, 2010. "Farm Expansion in Lithuania after Accession to the EU: The Role of CAP Payments in Alleviating Potential Credit Constraints," Europe-Asia Studies, Taylor & Francis Journals, vol. 62(2), pages 351-365.
    12. Yi, Fujin & Lu, Wuyi & Zhou, Yingheng, 2015. "Cash Transfers and Multiplier Effect: Lessons from the Grain Subsidy Program in China," 2015 Conference, August 9-14, 2015, Milan, Italy 211877, International Association of Agricultural Economists.
    13. Hans‐Peter Y. Qvist & Anders Holm & Martin D. Munk, 2021. "Demand and Supply Effects and Returns to College Education: Evidence from a Natural Experiment with Engineers in Denmark," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(2), pages 676-704, April.
    14. Serneels, Pieter & Beegle, Kathleen & Dillon, Andrew, 2017. "Do returns to education depend on how and whom you ask?," Economics of Education Review, Elsevier, vol. 60(C), pages 5-19.
    15. Dennis Egger & Johannes Haushofer & Edward Miguel & Paul Niehaus & Michael Walker, 2022. "General Equilibrium Effects of Cash Transfers: Experimental Evidence From Kenya," Econometrica, Econometric Society, vol. 90(6), pages 2603-2643, November.
    16. Jose M. Yorobe Jr. & Jauhar Ali & Valerien O. Pede & Roderick M. Rejesus & Orlee. P. Velarde & Huaiyu Wang, 2016. "Yield and income effects of rice varieties with tolerance of multiple abiotic stresses: the case of green super rice (GSR) and flooding in the Philippines," Agricultural Economics, International Association of Agricultural Economists, vol. 47(3), pages 261-271, May.
    17. Montenegro, Claudio E. & Patrinos, Harry Anthony, 2014. "Comparable estimates of returns to schooling around the world," Policy Research Working Paper Series 7020, The World Bank.
    18. Adrien Montalbo, 2019. "Education and economic development. The influence of primary schooling on municipalities in nineteenth-century France," Working Papers halshs-02286126, HAL.
    19. Muhammad Qahraman Kakar, 2021. "Ethnic Disparities, Women Education and Empowerment in South Asia," Erudite Ph.D Dissertations, Erudite, number ph21-01 edited by Manon Domingues Dos Santos.
    20. Mateusz Filipski & Anubhab Gupta & Justin Kagin & Arif Husain & Alejandro Grinspun & Oscar Maria Caccavale & Silvio Daidone & Valerio Giuffrida & Friederike Greb & Joseph Hooker & Susanna Sandström & , 2022. "A local general‐equilibrium emergency response modeling approach for sub‐Saharan Africa," Agricultural Economics, International Association of Agricultural Economists, vol. 53(1), pages 72-89, January.

    More about this item

    Keywords

    International Development;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea16:235474. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.