# **<mark>How cash transfers are targeted and delivered are important program design elements</mark>**

<mark>Recent studies suggest that cash transfers can cause declines in life satisfaction and reductions in psychological well‐being among non‐beneficiaries who live in the same communities as program beneficiaries.</mark><sup>9</sup> <mark>Cash transfers can cause prices of non‐tradable or perishable goods to increase in remote areas with weak links to markets, while in‐kind transfers can have the opposite effect of reducing food prices.</mark><sup>10</sup> <mark>A recent World Bank study of the Philippine CCT shows that such effects can have real consequences: price increases in protein‐rich perishable food items caused substantial increases in stunting among non‐beneficiary children.</mark><sup>11</sup> <mark>Hence, it is important for the World Bank and governments implementing large‐scale transfer programs to pay attention to spillover and general equilibrium effects.</mark> <mark>These findings have several implications for World Bank policies</mark> _<mark>:</mark>_

- A potentially promising way of resolving the tradeoff between CCT and UCT programs is to view them as complements to each other rather than alternatives.  Policymakers could provide a basic unconditional cash transfer to, say, adolescent females or poor households, topped up by conditional cash transfers for human capital accumulation and desired health behaviors – providing an incentive to invest in education and health while still guaranteeing a basic level of protection to those who are unable or unwilling to comply with program conditions.

- The promising evidence of the positive effect of UCTs on children’s height provides an additional reason to consider providing basic UCTs to adolescent girls and young women. Indeed, other researchers in the U.S. context have suggested that targeting transfers towards women of childbearing age would be beneficial, to maximize benefits to children _in utero_ . This form of targeting of young women would suffer from remarkably little ‘leakage’ in many countries in Sub‐ Saharan Africa, where the median ages at first childbirth are below 20. It would also have the added benefit of reducing fertility rates.

- <mark>The increasing popularity of “cash plus” programs, which involve cash transfers being delivered with complementary services/interventions, seems justified. For example, recent evidence from multi‐faceted anti‐poverty programs suggest complementarities between various program components, including cash transfers.</mark><sup>12</sup> <mark>A program in Bangladesh that combined a behavior change communication nutrition intervention with cash transfers through women’s groups that</mark>

> Esther, Pascaline Dupas, and Michael Kremer. 2017. The Impact of Free Secondary Education: Experimental Evidence from Ghana. Unpublished Manuscript.  https://web.stanford.edu/~pdupas/DDK_GhanaScholarships.pdf; Barham, Tania, Karen Macours, and John Maluccio. 2019. Experimental Evidence from a Conditional Cash Transfer Program: Schooling, Learning, Fertility, and Labor Market Outcomes After 10 Years. Working Paper;  Duflo, Esther, Pascaline Dupas, and Michael Kremer. 2015. Education, HIV, and Early Fertility: Experimental Evidence from Kenya. American Economic Review 105 (9): 2757‐97.

> 9Baird, Sarah, Jacobus De Hoop, and Berk Özler. 2013. Income Shocks and Adolescent Mental Health. Journal of Human Resources 48 (2): 370‐403; Haushofer, J., Reisinger, J., & Shapiro, J. (2019). Is Your Gain My Pain? Effects of Relative Income and Inequality on Psychological Well‐being. Working Paper.

> 10 Jesse M Cunha, Giacomo De Giorgi, and Seema Jayachandran, 2019, The Price Effects of Cash Versus In‐Kind Transfers, The Review of Economic Studies 86 1): 240–81.

> 11 Filmer, Deon, Jed Friedman, Eeshani Kandpal, and Junko Onishi. 2018. Cash Transfers, Food Prices, and Nutrition Impacts on Nonbeneficiary Children. Working Paper.

> 12 Banerjee, Abhijit, Dean Karlan, Robert Darko Osei, Hannah Trachtman, and Christopher Udry. 2018. Unpacking a Multi‐Faceted Program to Build Sustainable Income for the Very Poor. NBER Working Paper 24271.

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