1. contact@e-mfp.eu www.e-mfp.eu Impact of Ultra-Poor Graduation Pilots: Early Results from Randomized Evaluations Bram Thuysbaert Yale University and IPA November 15, 2012 With A.Banerjee, E. Duflo, D. Karlan, J. Morduch, and others Preliminary and Incomplete

2. contact@e-mfp.eu www.e-mfp.eu Pilots in 10 Sites Pilot sponsored by CGAP and Ford Foundation: Ghana, Haiti, Honduras, India(3), Ethiopia, Pakistan, Peru, Yemen Randomized evaluations at 8 sites ( )

3. contact@e-mfp.eu www.e-mfp.eu Who are the Ultra Poor? A few facts Most had at least 2 meals previous day  India: 62%  Pakistan: 75%  Yemen: 87.5%  Ethiopia: 83% But most also faced food shortages in at least some months in the past year Large share of expenses spent on food and fuel:  Pakistan: 54%  India: 72%  Peru: 70%  Yemen: 69% Pakistan Yemen In past 12 months, did HH members get enough food?

4. contact@e-mfp.eu www.e-mfp.eu Who are the Ultra Poor? Vulnerable to shocks  India: 29% of selected HH experience 1 or more health shock in past year  Pakistan: Medical expenses 12% of HH budget Remote areas  More than 1 hour to nearest health center Peru: 24-30% Honduras: 28-58%

5. contact@e-mfp.eu www.e-mfp.eu Fundamental research question What is the impact of the Graduation model on the ultra poor?  Impact evaluation measures: How have the lives of households changed compared to how they would have changed in the absence of the program?  Note this is different from “How have their lives changed?” The control group gives us the counterfactual  Random treatment assignment ensures we compare similar types of households

6. contact@e-mfp.eu www.e-mfp.eu Data collection Baseline Consumption surveys 2 nd follow-up survey 1st follow-up survey Collect data on eligible households Many sites have quarterly surveys to monitor changes Survey of same baseline households after 2 years (end of program support) 1 year after 1 st follow-up survey to track more long-term impacts

7. contact@e-mfp.eu www.e-mfp.eu Sample size Many 100’s of households in a few tens of villages Survey modules Health indicators Education Consumption Income and activities Assets Credit Risk preferences Ongoing qualitative research Data collection

8. contact@e-mfp.eu www.e-mfp.eu Asset transfers Honduras Pakistan Ethiopia

9. contact@e-mfp.eu www.e-mfp.eu Preliminary Results

10. contact@e-mfp.eu www.e-mfp.eu Results from 2 nd follow-up survey: Consumption o 7% increase in food consumption o 20% increase in non-food consumption Improved food security o 14 percentage points increase in share of households that report having enough food every day India – West Bengal (Bandhan) Researchers: Banerjee, Duflo et al.

11. contact@e-mfp.eu www.e-mfp.eu Livestock holdings o Large effect on animal holdings (years after asset transfer!) Income generation o Increased income from livestock o Increase in profits from micro-enterprises Household durables o Significant increase in HH durables index India – West Bengal (Bandhan)

12. contact@e-mfp.eu www.e-mfp.eu Savings and borrowing o Suggestive evidence of increase in savings deposited in last 30 days (not statistically significant) o 52.9% increase in total borrowing Health o Increase in health knowledge o Large gains in mental health at 1 st follow-up but no longer at 2 nd follow-up India – West Bengal (Bandhan)

13. contact@e-mfp.eu www.e-mfp.eu Results from 2 nd follow-up survey: Consumption o No effects on consumption or food security Income generation o Increased income from livestock o But self-employment displaces wage labor o No net effect on income Livestock o Effect on livestock holdings but decreasing over time Savings and borrowing o No effects India – Andra Pradesh(SKS) Researchers: Morduch, Ravi and Bauchet

14. contact@e-mfp.eu www.e-mfp.eu Pakistan Researchers: Karlan and Pariente Results from 1 st follow-up survey: Consumption o 10% increase in monthly consumption food consumption emergency expenses Improved food security o Increase in share of households that eat twice a day (3 % points) o Decrease in share of households that experience food shortages

15. contact@e-mfp.eu www.e-mfp.eu Pakistan Income generation o Important increase in agricultural output o Increase in micro- enterprise profits o No clear effects on livestock income Assets o Increase in livestock holdings o Increase in physical assets

16. contact@e-mfp.eu www.e-mfp.eu Honduras Researchers: Karlan and Thuysbaert Consumption and non -food expenditures o No effects Improvement in food security and in self-assessed economic situation o Adults 5 percentage points less likely to have reduced meals o Improved perception of own economic situation

17. contact@e-mfp.eu www.e-mfp.eu Honduras Income generation o No effects on overall agricultural output nor business profits o Increase in vegetable production o Increased income from livestock Livestock o 25% increase in total value of livestock owned Savings o Increased savings Mental health o Improvement in happiness index

18. contact@e-mfp.eu www.e-mfp.eu Conclusion First results very promising  Enlarged asset base  More self-employment  Improved food security  Increased food and non-food consumption  Improved happiness  … But variation across sites  Are some areas less suitable for graduation model than others?  Choice of livelihoods? Critical questions for evaluation  Long term  Cost-effectiveness No definitive answers yet  More data and analysis coming soon!

19. contact@e-mfp.eu www.e-mfp.eu Thank You! www.poverty-action.org bthuysbaert@poverty-action.org www.cgap.org