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Causal pathways of the productive impacts of cash transfers: Experimental evidence from Lesotho

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  • Prifti, Ervin
  • Daidone, Silvio
  • Davis, Benjamin

Abstract

This paper has the double aim to study whether unconditional cash transfers have an impact on farm production and to look into the causal mechanisms through which government transfers produce productive impacts. We use mediation analysis to identify the total effect of transfers on farm production and to isolate the influence of the labour channel from other transmission channels. In particular, we analyze whether changes in farm production are caused by transfer-induced changes in the use of farm labour – either by reallocating family labour between off- and on-farm work or by changes in the demand for hired labour – or if other transmission channels are at work. We find that cash transfers have a sizable impact on farm production but they do not lead to increased use of family or hired labour on the farm, which implies that the productive impacts of cash transfers flow through other channels, different from the labour one.

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  • Prifti, Ervin & Daidone, Silvio & Davis, Benjamin, 2019. "Causal pathways of the productive impacts of cash transfers: Experimental evidence from Lesotho," World Development, Elsevier, vol. 115(C), pages 258-268.
    • Handle: RePEc:eee:wdevel:v:115:y:2019:i:c:p:258-268
    DOI: 10.1016/j.worlddev.2018.11.020
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    Cited by:

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    5. Mastrorillo, Marina & Scognamillo, Antonio & Ginet, Camille & Pietrelli, Rebecca & d’Errico, Marco & Ignaciuk, Adriana, 2022. "Enhancing refugees’ self-reliance in Uganda – The role of cash and food assistance," ESA Working Papers 324702, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    6. Owusu-Addo, Ebenezer & Renzaho, Andre M.N. & Smith, Ben J., 2020. "Developing a middle-range theory to explain how cash transfers work to tackle the social determinants of health: A realist case study," World Development, Elsevier, vol. 130(C).
    7. Sitko, Nicholas J. & Scognamillo, Antonio & Malevolti, Giulia, 2021. "Does receiving food aid influence the adoption of climate-adaptive agricultural practices? Evidence from Ethiopia and Malawi," Food Policy, Elsevier, vol. 102(C).
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    More about this item

    Keywords

    Cash transfers; Agricultural production; Mediation analysis; RCT;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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