# **5.4 Effects on Reciprocity of Informal Transfers**

In order to estimate the treatment effect on reciprocity of transfers, I estimate specification (1) using as the outcome variable the fraction of ultra-poor’s transfer sources who are also reported as receivers of transfers. Table 8 presents the results. In the control group, 51% of ultra-poor’s transfer sources were also reported as recipients of transfers by the ultra-poor. The program led to an 8ppt increase (15%) in the reciprocity of ultra-poor’s transfer connections. The following columns of the table break down this measure according to the baseline wealth class of the connection. The results show that the reciprocity of ultra-poor’s transfers increased with all wealth classes, and especially with households who were ranked in higher wealth classes at baseline. In particular, reciprocity of ultra-poor’s transfers increased by 9ppt (17%) with other poor, by 9ppt (19%) with middle class and by 12ppt (44%) with upper class households. In contrast, the increase in reciprocity of transfers with other ultra-poor was 4.4ppt (7%) and marginally significant.<sup>29</sup> An alternative source of transfers for ultra-poor households at baseline may be their employer(s). Baseline correlations presented in section 4.1 suggested that such transfers may be reciprocated by working for a lower wage rate, lowering the costs of labor for the employers.<sup>30</sup> In Table 9, I test whether the program affected ultra-poor households’ likelihood to receive transfers from their members’ employers. The dependent variable in column 1 is an indicator for received transfers from an em- having any ployer of either the main female respondent or the male head of the household. On average, 9% of ultra-poor households in the control group reported an employer as a source of transfers for their household. The program led to a fall in the likelihood of receiving transfers from employers by 4 ppt. This effect is both statistically and economically significant (43% relative to the control group). The next two columns show the effect for the female and the male respondent(s) separately. Ultra-poor households were 4ppt less likely to receive transfers from an employer of the main female respondent, while the corresponding effect for the male respondents were 1.3ppt. While these effects suggest that the improvement in socio-economic conditions of ultra-poor households may have reduced their engagement in interlinked labor contracts, they may also be driven by the fall in wage-labor caused by the program. In fact, Table S1.7 in Appendix S1 shows that the program significantly reduced labor supply of both female and male respondents into wage-labor (although the effect on the extensive margin is insignificant for the latter). As such, it is possible that the fall in likelihood of

> 29Appendix Table S2.5 tests whether the treatments effects on reciprocity of ultra-poor’s transfer links differ between the midline and endline surveys. The results show that the treatment effects were significantly higher at endline relative to midline. This implies that the increase in reciprocity happened gradually over time, and was only fully realized by the endline survey. In other words, it took time for the ultra-poor households to establish reciprocal transfer links.

> 30See Table S1.3 discussed in footnote 19 above.

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