Randomized Evaluation of the Unconditional Cash Transfer Scheme for the Elderly in Ekiti State Nigeria

Many countries in the developing world have implemented non-contributory old age pensions. However, evidence of the impacts on the elderly in Sub-Saharan Africa is scarce. This paper provides the first evidence from a randomized evaluation of an unconditional and non-contributory pension scheme targeted at the elderly and implemented in Ekiti State, Nigeria. The goal is to examine the extent to which such a scheme can serve as an instrument to improve the wellbeing of the beneficiaries in terms of improving their quality of life and reducing household vulnerability. The data used were collected over two six-month follow-up intervals from 6,326 eligible beneficiaries and 18,954 household members across 112 electoral wards in Ekiti State. The randomization of beneficiaries into treatment and control groups is done at the ward level, where 3,178 beneficiaries are eligible to receive an unconditional and non-contributory cash transfer and 3,148 beneficiaries are kept as controls. Treated beneficiaries self-report better overall quality of life, mainly in terms of more stable mental health, higher perceptions of happiness and capabilities, improvement in personal relationships, enhancing their community activities, and better health rating. However, the significant contributors to these results differ between the first and second follow-ups. Also, these effects are incremental in nature, suggesting that they are potentially sustainable over time. The findings provide evidence-based support for demand side interventions to improve the welfare of poor households, but also raise important policy implications for implementing countries. For Nigeria, there is scope for scaling-up to the national level targeting poor households. However, a successful and sustainable national social security scheme requires more equitable eligibility criteria, strong political will and commitment by the government.