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Great Expectations: Responses to Current and Future Transfers for Low-Income Individuals

Author

Listed:
  • Adhvaryu, Achyuta
  • Gauthier, Jean-François
  • Jakiela, Pamela
  • Karlan, Dean

Abstract

How does the expectation of aid change behavior? We propose a simple approach to separate expectations effects from the direct effects of relaxing resource constraints: compare the promise of a program to the program itself. We test this approach in a four-arm randomized controlled trial of cash transfers in Uganda. Both those who received cash and those promised-to-receive cash increase their labor supply and investment. Immediate transfers also increase household expenditures and savings. Our results are not consistent with standard life-cycle models; they are better explained by a model in which the transfer increases individual labor productivity.

Suggested Citation

  • Adhvaryu, Achyuta & Gauthier, Jean-François & Jakiela, Pamela & Karlan, Dean, 2026. "Great Expectations: Responses to Current and Future Transfers for Low-Income Individuals," CEPR Discussion Papers 21174, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:21174
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    Keywords

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    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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