International evidence to inform decision making on implementing urgent response social protection measures

Abstract

ABSTRACT This paper summarises evidence from a rapid review of international findings on the effects of cash transfers. The learnings were used to inform the design of urgent response social protection during the COVID-19 pandemic. The summary demonstrates that in response to widespread disruption, cash transfers have broad benefits for children, adults, and the wider economy. First, cash grants for child support have been shown to reduce hunger, increase dietary diversity, and reduce secondary school dropout. Transfers may also reduce child malnutrition. Second, there is some evidence that cash grants could encourage job search and economic activity. By contrast, there is little evidence that grants discourage adults from working, or increase spending on temptation goods (alcohol, tobacco). Third, for the wider economy, there is little evidence that grants will increase inflation, while some studies find that transfers create a fiscal multiplier and stimulate the local economy. Finally, we review evidence on design considerations and find that unconditional cash transfers (UCTs) are particularly well suited to rapid response when compared to conditional cash transfers (CCTs). Outside crisis settings, there is some evidence that getting recipients to enrol children in school or attend health check-ups improves these outcomes more than unconditional grants. However, the differences are small and the additional costs of implementing conditions outweigh these benefits in circumstances where response is required urgently. Comparing evidence on cash grants and food vouchers suggests both achieve similar improvements in nutrition; however, cash transfers are likely to be more cost-effective for governments, especially where a system to distribute grants is already set up.