1 1. General Equilibrium Effects of a Large-Scale Cash Transfer

Citation: Egger et al. [2022]

Research question: Large-scale unconditional cash transfers (UCTs) may generate spillover effects on local markets that affect even non-recipients. Does the GiveDirectly UCT programme in rural Kenya produce positive general equilibrium (GE) effects on recipient and non-recipient households?

Identification strategy: Randomised controlled trial at the village level (506 eligible villages), with some villages receiving large lump-sum transfers ($\approx$ $1000 per household) and others serving as control villages. Crucially, the study also varies the saturation (share of households treated) within villages, and includes non-recipient households in the analysis to estimate GE spillovers. This design allows separate identification of direct effects (recipient households) and market-mediated spillovers (non-recipient households in treatment villages).

Key result: Per household transfers of $1000 generate roughly $2.60 in local GDP per dollar transferred (a fiscal multiplier exceeding 2). Non-recipient households experience significant income gains of approximately $0.43 per dollar transferred to recipient neighbours, operating primarily through local goods markets. Enterprise revenues increase for local businesses in treatment villages, driven by increased consumer demand. Effects on agricultural wages are modest and not statistically significant, suggesting limited labour market distortions.

Takeaway: Large-scale UCTs generate substantial positive GE effects that are missed by partial equilibrium analyses. Cost-effectiveness calculations that ignore spillovers substantially underestimate the full impact of cash transfer programmes.

2 2. Long-Run Effects of PROGRESA on Adult Outcomes

Citation: Parker and Todd [2017]

Research question: Mexico's PROGRESA programme (now Oportunidades/Prospera) conditioned transfers on school attendance and healthcare visits. Beyond the short-run schooling effects documented in earlier work, does PROGRESA affect adult labour market outcomes, health, and fertility?

Identification strategy: PROGRESA was randomised at the village level: 320 villages received the programme in 1997 and 186 villages were controls (receiving the programme in 1999). The study exploits this staggered introduction and uses the original randomisation to generate long-run comparisons between households who entered the programme early versus late, following cohorts into adulthood.

Key result: Exposure to PROGRESA during childhood (ages 0-18) increases adult completed schooling by approximately 0.6 years for women and 0.4 years for men. Women who were children during programme exposure are 10% more likely to be employed in formal employment and have 0.15 fewer children by age 25, consistent with an increase in female human capital reducing fertility. Effects on earnings are positive but imprecisely estimated, with 10-15% point estimates consistent with typical returns to schooling.

Takeaway: Early-life exposure to conditional cash transfers has persistent effects on human capital accumulation and fertility into adulthood, consistent with the programme working through schooling channels rather than pure liquidity relief.

3 3. Microcredit at Scale: A Meta-Analytic Assessment

Citation: Banerjee et al. [2015]

Research question: Does access to microcredit (small loans to informal entrepreneurs and poor households) generate the transformative economic development effects claimed by microcredit advocates?

Identification strategy: Six simultaneous RCTs of microcredit expansion conducted in six countries (Ethiopia, India, Mexico, Mongolia, Morocco, and Bosnia and Herzegovina), coordinated by J-PAL, allowing meta-analysis of ITT effects across contexts. Each study randomised access to microcredit at the neighbourhood or group level, comparing outcomes for households with expanded access to those without.

Key result: The evidence strongly rejects large positive effects on consumption, income, or poverty. Microcredit modestly increases business investment for pre-existing entrepreneurs (+15-20% in some sites) but has near-zero effects on household consumption, income, or women's empowerment. Heterogeneous effects show larger benefits for "business-minded" households, but identifying this subgroup ex ante is difficult.

Takeaway: Microcredit is not a poverty trap escape hatch. It provides financial access that is valuable at the margin, but the transformative effects claimed in early case studies do not hold up in randomised evaluations at scale. Development policy should focus on complementary investments (health, education, infrastructure) rather than on credit access alone.

4 4. Deworming and Long-Run Human Capital: Revisiting the Evidence

Citation: Baird et al. [2016]

Research question: Following the influential Miguel and Kremer [2004] study showing that deworming in Kenya increased school attendance substantially, does the treatment have persistent effects on adult labour market outcomes?

Identification strategy: Long-run follow-up (10+ years after the original intervention) of the original Primary School Deworming Project, tracking participants into adulthood. The original intervention randomised schools into treatment and control phases; the long-run follow-up exploits this original randomisation. Attrition is addressed by tracking the full original sample and using bounds analysis.

Key result: Men who received deworming as primary school children work more hours per week (+3.4 hours), have higher consumption (+10%), are more likely to be employed in the formal or manufacturing sector, and live in areas with higher electrification rates all consistent with higher human capital. Effects on women are smaller and less consistent. Earnings effects are positive but sensitive to specification and attrition adjustment.

Takeaway: Low-cost deworming interventions have persistent effects on labour market outcomes 10 years post-intervention, suggesting that childhood disease burden has long-run consequences for human capital beyond what is captured by contemporary schooling measures. The worm wars controversy (Aiken et al. 2015) over these findings reflects genuine statistical disagreements about attrition and specification, not fabricated evidence.

References

1. Baird, S., Hicks, J. H., Kremer, M., and Miguel, E. (2016). Worms at work: Long-run impacts of a child health investment. Quarterly Journal of Economics, 131(4):1637-1680.
2. Banerjee, A., Duflo, E., Glennerster, R., Kinnan, C., Crepon, B., Devoto, F., Pariente, W., Prina, S., Topalova, P., Karlan, D., and Zinman, J. (2015). The miracle of microfinance? Evidence from a randomized evaluation. American Economic Journal: Applied Economics, 7(1):22-53.
3. Egger, D., Haushofer, J., Miguel, E., Niehaus, P., and Walker, M. W. (2022). General equilibrium effects of cash transfers: Experimental evidence from Kenya. Econometrica, 90(6):2603-2643.
4. Miguel, E. and Kremer, M. (2004). Worms: Identifying impacts on education and health in the presence of treatment externalities. Econometrica, 72(1):159-217.
5. Parker, S. W. and Todd, P. E. (2017). Conditional cash transfers: The case of Progresa/Oportunidades. Journal of Economic Literature, 55(3):866-915.
6. Schultz, T. P. (2004). School subsidies for the poor: Evaluating the Mexican Progresa poverty program. Journal of Development Economics, 74(1):199-250.