Monday, September 23, 2013

Cash grants and skill development

An interesting study, though the question I'd wonder is how sustainable it is. One of the problems in microfinance is that it doesn't reach the poorest of the poor. Did this program? At $382 per person, I suspect it didn't - especially since it also required recipients to form groups to request funds.

It would also be interesting to see what the impact would be for something more sustainable like loans - but nevertheless, it's a study where there are demonstrable gains to the intervention - which is a lot more than many other interventions (Chris Blattman):

We study a government program in Uganda designed to help the poor and unemployed become self-employed artisans. The program targeted people ages 16 to 35 in Uganda’s conflict-affected north, inviting them to form groups and submit grant proposals to pay for vocational training and business start-up.

Funding was randomly assigned, and treatment groups received unsupervised cash grants of $382 per member on average. The government’s main aims were to increase in-comes and thus also promote social stability.

The treatment group invests some of the grant in skills training but most in tools and materials. After four years half practice a skilled trade. Relative to the control group, the program increases business assets by 57%, hours of work by 17%, and earnings by 38%.

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