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

Author

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

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

  • Achyuta Adhvaryu & Jean-François Gauthier & Pamela Jakiela & Dean Karlan, 2026. "Great Expectations: Responses to Current and Future Transfers for Low-Income Individuals," NBER Working Papers 34857, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34857
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    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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