The impact of the Kenya Cash Transfer Program for Orphans and Vulnerable Children on household spending

The Kenya CT-OVC Evaluation Team

54 citations0/0 files storedJournal of Development Effectiveness

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Poverty, Education, and Child Welfare International Development and Aid Gender, Labor, and Family Dynamics

Abstract

The Kenya Cash Transfer Program for Orphans and Vulnerable Children (CT-OVC) is the government's flagship social protection programme, reaching over 130,000 households and 260,000 orphans and vulnerable children across the country as of late 2011. The objective of this paper is to investigate whether the CT-OVC has changed the preferences of households in terms of their consumption behaviour. We compare standard difference-in-differences programme effects with ex-ante expected effects given baseline expenditure elasticities. As a result of the programme, participating households had significantly higher expenditures than control households on food, health, and clothing and significantly less spending on alcohol and tobacco. Programme impacts were also seen on spending in four of seven food groups. To test whether the programme simply moves households along their total expenditure Engel curve or in fact shifts that curve, we compare ex-ante expected behaviours with the ex-post actual response of households to the programme. We find in fact that in about one-half of the consumption categories ex-ante predicted and ex-post actual effects are significantly different, implying that preferences may have changed among programme recipients. We then directly test whether the programme has induced significant changes in expenditure elasticities (as implied by their associated marginal propensities to consume) and find evidence of this for alcohol and tobacco, and to a lesser extent for food, health and transportation and communication.

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References

1980Economics and Consumer Behavior 2009Conditional Cash Transfers 2006The Experience of Conditional Cash Transfers in Latin America and the Caribbean 2010Does Money Matter? The Effects of Cash Transfers on Child Development in Rural Ecuador 2000The Labeling Effect of a Child Benefit System 1989The Influence of Household Composition on Household Expenditure Patterns: Theory and Spanish Evidence 1996Expenditure behavior and children's welfare: An analysis of female headed households in Jamaica 2009Opening Up Pandora’s Box: The Effect of Gender Targeting and Conditionality on Household Spending Behavior in Mexico’s Progresa Program

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