Can unconditional cash transfers raise long-term living standards? Evidence from Zambia

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Journal of Development Economics, ISSN: 0304-3878, Vol: 133, Page: 42-65

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Sudhanshu Handa; Luisa Natali; David Seidenfeld; Gelson Tembo; Benjamin Davis
Elsevier BV
Social Sciences; Economics, Econometrics and Finance
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In Africa, state-sponsored cash transfer programs now reach nearly 50 million people. Do these programs raise long-term living standards? We examine this question using experimental data from two unconditional cash transfer programs implemented by the Zambian Government. We find far-reaching effects of the programs both on food security and consumption as well as on a range of productive outcomes. After three years, household spending is on average 67 percent larger than the value of the transfer received, implying a sizeable multiplier effect, which works through increased non-farm activity and agricultural production.