Lawlor, Kathleen. Impacts of Poverty Reduction Programs In Remote Rural Landscapes: Evidence From Cash Transfers In Zambia. Chapel Hill, NC: University of North Carolina at Chapel Hill Graduate School, 2015. https://doi.org/10.17615/w6sc-cr86
Lawlor, K. (2015). Impacts of Poverty Reduction Programs in Remote Rural Landscapes: Evidence from Cash Transfers in Zambia. Chapel Hill, NC: University of North Carolina at Chapel Hill Graduate School. https://doi.org/10.17615/w6sc-cr86
Lawlor, Kathleen. 2015. Impacts of Poverty Reduction Programs In Remote Rural Landscapes: Evidence From Cash Transfers In Zambia. Chapel Hill, NC: University of North Carolina at Chapel Hill Graduate School. https://doi.org/10.17615/w6sc-cr86
Affiliation: College of Arts and Sciences, Department of Public Policy
This dissertation, composed of three studies, examines the potential for unconditional cash transfers to reduce poverty in rural Africa and considers the serious challenges posed by weak market access, natural resource dependence, and climate shocks that threaten food supplies. To investigate these questions we harness the randomized roll-out of Zambia's Child Grant Program, which extends - unconditionally - payments of 60 kwacha (about $12) per month to households with a child under the age of five. We find that these relatively small cash payments are transformative for rural Zambian households in numerous ways. First, cash transfers empower poor, rural households facing weather and other negative income shocks to employ coping strategies typically used by the non-poor, such as spending savings. The transfers also enable households to substantially increase their food consumption and overall food security over time, despite widespread drought and flooding. Second, cash transfers allow households to expand their farms. Third, the income effects of cash are powerful enough to shift livelihood strategies and convert subsistence farmers into small-scale farmers that sell some fraction of their crops in markets, purchase agricultural inputs, and own non-farm businesses. However, there is significant impact heterogeneity moderated by households' market access. We find that while cash is more transformative than bicycle ownership (which can facilitate market access) in terms of converting subsistence farmers into small-scale sellers, bicycles can empower households already engaged in agricultural markets to increase their crop sales over time - even in the context of declining crop revenues. We also find that cash has a greater impact on farm expansion for households living far from markets, while households living close to markets are more likely to use the transfer to start non-farm businesses and consume charcoal. These three studies provide evidence that unconditional cash transfers facilitate rural households' autonomous adaptation and development decisions and these decisions are helping households escape poverty, despite challenges posed by climate change and remoteness. However, the productive impacts of cash transfers in rural areas could be enhanced by complementary initiatives that improve market access and promote sustainable use of natural resources.