A study by Robert Hawkins, the McSilver Associate Professor in Poverty Studies at the Silver School of Social Work, is under way in Del Carmen, Philippines, an island municipality where 70 percent of the 17,100 people live in poverty, while a far smaller portion of the population receives public assistance.
The study, to be completed in 2015, is funded by the Silver School’s McSilver Institute for Poverty Policy and Research.
NYU Research Digest caught up with Hawkins as he prepared this randomized trial designed to find out whether the Philippines’ practice of distributing welfare with strings attached—known as conditional cash transfers—works better than the more traditional method of offering cash assistance to the poor with few or no eligibility conditions.
Your experiment challenges the growing penchant in many nations for requiring the poor to look for jobs, perform volunteer work, and keep their children in school with decent grades in order for the households to be eligible for welfare.
It’s interesting. Several countries—Mexico, Brazil, Ghana, and the Philippines—have indeed shifted in recent years to conditional cash transfers, many with support from the World Bank. But there’s very little data to tell us whether the model works better to alleviate poverty.
Some research finds that conditional cash transfers do work well, but there are a small number of studies that suggest that few or no conditions for welfare may be effective too. My study is based on the idea that a government’s expectation that a household will do something positive with their welfare funds may have a stronger effect on a family’s well-being than placing conditions on eligibility for the funds.
How will your experiment work?
We’ll draw a data sample of families who get the conditional cash transfers, and a matched sample of those who are eligible to receive the cash transfers but do not, due in many cases to politics at the state or national levels. To the latter group we’ll supply the same amount of funds that the family would have gotten if they were funded by welfare. The maximum welfare grant is about $32 a month.
What kinds of household changes will you measure in each sample?
We’ll measure the psychological well-being of the household head and a child, looking for changes in eating habits, contentedness, and decisions about money. We’ll also look at educational outcomes for children.
We want to know what kinds of decisions someone would make if they had more autonomy. Let’s say governments didn’t give money to low-income families based on the old stereotypes of poor people being lazy, or not caring about their kids. Would families make what they consider to be rational decisions on how to spend welfare funds?
What do you think?
We all speculate and I have my hypothesis, which is that financial decision making is more calculated than impulsive, and families will make reasoned choices based on perceived need.
At present, there are few data that tell us how families respond when they have no or few conditions attached to their welfare aid. We are simply asking, “What if there are no conditions, but high expectations of success are communicated nonetheless to the recipients of welfare funds?” Rarely have we seen this question addressed in a controlled study.