Conditional cash transfer (CCT) programs aim to reduce poverty or advance social goals by encouraging desirable behavior that recipients under-invest in. An unintended consequence of conditionality may be the distortion of recipients’ behavior in ways that lower welfare. We first illustrate a range of potential distortions arising from CCT programs around the world. We then show that in the simple case where a CCT causes low return participants to select into a behavior, and social returns and private perceived returns are aligned, transfer size plays an important role: the larger the transfer, the stronger the distortion becomes, implying that (i) there is an optimal transfer size for such CCTs, and (ii) unconditional cash transfers (UCTs) may be better than CCTs when the transfer amount is large. We provide empirical evidence consistent with these claims by studying a cash transfer program conditional on seasonal labor migration in rural Indonesia. In line with theory, we show that when the transfer size exceeds the amount required for travel expenses, distortionary effects dominate and migration earnings decrease.
Reliable testing data for new infectious diseases like COVID-19 is scarce in developing countries making it difficult to rapidly diagnose spatial disease transmission and identify at-risk areas. We propose a method that uses readily available data on bi-lateral migration channels combined with COVID-19 cases at respective migrant destinations to construct a spatially oriented risk index. We find significant and consistent association between our measure and various types of outcomes including actual COVID-19 cases and deaths, indices of government policy responses, and community mobility patterns. Results suggest that future pandemic models should incorporate migration-linkages to predict regional socio-economic and health risk exposure.
South Asians traveling to richer Asian nations is the world's largest migration corridor. We track down applicants to a government lottery that randomly allocated visas to Bangladeshis for temporary labor contracts in Malaysia, five years later. Most lottery winners migrate, and migrants' earnings triple. Their remittance raises their family's standard of living in Bangladesh. The migrant's absence pauses marriage and childbirth and shifts decision-making power toward females. Migration removes enterprising individuals, lowering household entrepreneurship, but does not crowd out other family members' labor supply. A deferred migration offer never materialized for a subgroup. Their premigration investments in skills generate no returns in the domestic market.
This paper studies the welfare effects of encouraging rural–urban migration in the developing world. To do so, we build and analyze a dynamic general-equilibrium model of migration that features a rich set of migration motives. We estimate the model to replicate the results of a field experiment that subsidized seasonal migration in rural Bangladesh, leading to significant increases in migration and consumption. We show that the welfare gains from migration subsidies come from providing better insurance for vulnerable rural households rather than from correcting spatial misallocation by relaxing credit constraints for those with high productivity in urban areas that are stuck in rural areas.
Addressing public health externalities often requires community-level collective action. Due to social norms, each person’s sanitation investment decisions may depend on the decisions of neighbors. We report on a cluster randomized controlled trial conducted with 19,000 households in rural Bangladesh where we grouped neighboring households and introduced (either financial or social recognition) rewards with a joint liability component for the group, or asked each group member to make a private or public pledge to maintain a hygienic latrine. The group financial reward has the strongest impact in the short term (3 months), inducing a 7.5–12.5 percentage point increase in hygienic latrine ownership, but this effect dissipates in the medium term (15 months). In contrast, the public commitment induced a 4.2–6.3 percentage point increase in hygienic latrine ownership in the short term, but this effect persists in the medium term. Non-financial social recognition or a private pledge has no detectable effect on sanitation investments.
This paper studies the response of agricultural production to rural labor loss during the process of urbanization. Using household microdata from India and exogenous variation in migration induced by urban income shocks interacted with distance to cities, we document sharp declines in crop production among migrant-sending households residing near cities. Households with migration opportunities do not substitute agricultural labour with capital, nor do they adopt new agricultural machinery. Instead, they divest from agriculture altogether and cultivate less land. We use a two-sector general equilibrium model with crop and land markets to trace the ensuing spatial reorganization of agriculture. Other non-migrant village residents expand farming (land market channel) and farmers in more remote villages with fewer migration opportunities adopt yield-enhancing technologies and produce more crops (crop market channel). Counterfactual simulations show that over half of the aggregate food production losses driven by urbanization is mitigated by these spillovers. This leads to a spatial reorganization in which food production moves away from urban areas and towards remote areas with low emigration.
Background: A growing body of scientific evidence suggests that face masks can slow the spread of COVID-19 and save lives, but mask usage remains low across many parts of the world, and strategies to increase mask usage remain untested and unclear. Methods: We conducted a cluster-randomized trial of community-level mask promotion in rural Bangladesh involving 341,830 adults in 600 villages. We employed a series of strategies to promote mask usage, including free household distribution of surgical or cloth masks, distribution and promotion at markets and mosques, mask advocacy by Imams during Friday prayers, role modeling by local leaders, promoters periodically monitoring passers-by and reminding people to put on masks, village police accompanying those mask promoters, providing monetary rewards or certificates to villages if mask-wearing rate improves, public signaling of mask-wearing via signage, text message reminders, messaging emphasizing either altruistic or self-protection motives for mask-wearing, and extracting verbal commitments from households. The primary objective was to assess which of these interventions would increase proper (covering nose and mouth) wearing of face masks, and secondarily, whether mask promotion unintentionally creates moral hazard and decreases social distancing. This analysis is part of larger study evaluating the effect of mask-wearing on transmission of SARS-CoV-2.
Results: There were 64,937 households in the intervention group and 64,183 households in the control group; study recruitment has ended. In the control group, proper mask-wearing was practiced by 13% of those observed across the study period. Free distribution of masks along with role modeling by community leaders produced only small increases in mask usage during pilot interventions. Adding periodic monitoring by mask promoters to remind people in streets and public places to put on the masks we provided increased proper mask-wearing by 29.0 percentage points (95% CI: 26.7% - 31.3%). This tripling of mask usage was sustained over all 10 weeks of surveillance, which includes a period after intervention activities ended. Physical distancing, measured as the fraction of individuals at least one arm’s length apart, also increased by 5.2 percentage points (95% CI: 4.2%-6.3%). Beyond the core intervention package comprised of free distribution and promotion at households/mosques/markets, leader endorsements plus periodic monitoring and reminders, several elements had no additional effect on mask wearing, including: text reminders, public signage commitments, monetary or non-monetary incentives, altruistic messaging or verbal commitments, or village police accompanying the mask promoters (the last not cross-randomized, but assessed in panel data). No adverse events were reported during the study period.
Conclusions: Our intervention demonstrates a scalable and cost-effective method to promote mask adoption and save lives, and identifies a precise combination of intervention activities that were necessary. Comparisons between pilots shows that free mask distribution alone is not sufficient to increase mask-wearing, but adding periodic monitoring in public places to remind people to wear the distributed masks had large effects on behavior. The absence of any further effect of the village police suggests that the operative mechanism is not any threat of formal legal sanctions, but shame and people’s aversion to a light informal social sanction. The persistence of effects for 10 weeks and after the end of the active intervention period, as well as increases in physical distancing, all point to changes in social norms as a key driver of behavior change. Our cross-randomizations suggest that improved mask-wearing norms can be achieved without incentives that require costly monitoring, that aesthetic design choices and colors can influence mask-wearing, and that surgical masks with a substantially higher filtration efficiency can be a cost-effective alternative to cloth masks (1/3 the cost) and are equally or more likely to be worn. Implementing these interventions – including distribution of free masks, and the information campaign, reminders, encouragement – cost $2.30-$3.75 per villager, or between $8 and $13 per person adopting a mask. Combined with existing estimates of the efficacy of masks in preventing COVID-19 deaths, this implies that the intervention cost $28,000-$66,000 per life saved. Beyond reducing the transmission of COVID-19, mask distribution is likely to be a cost-effective strategy to prevent future respiratory disease outbreaks.
Methods: We conducted a cluster-randomized trial of community-level mask promotion in rural Bangladesh from November 2020 to April 2021 (N=600 villages, N=342,126 adults). We cross-randomized mask promotion strategies at the village and household level, including cloth vs. surgical masks. All intervention arms received free masks, information on the importance of masking, role modeling by community leaders, and in-person reminders for 8 weeks. The control group did not receive any interventions. Neither participants nor field staff were blinded to intervention assignment. Outcomes included symptomatic SARS-CoV-2 seroprevalence (primary) and prevalence of proper mask-wearing, physical distancing, and symptoms consistent with COVID-19 (secondary). Mask-wearing and physical distancing were assessed through direct observation at least weekly at mosques, markets, the main entrance roads to villages, and tea stalls. At 5 and 9 weeks follow-up, we surveyed all reachable participants about COVID-related symptoms. Blood samples collected at 10-12 weeks of follow-up for symptomatic individuals were analyzed for SARS-CoV-2 IgG antibodies.
Results: There were 178,288 individuals in the intervention group and 163,838 individuals in the control group. The intervention increased proper mask-wearing from 13.3% in control villages (N=806,547 observations) to 42.3% in treatment villages (N=797,715 observations) (adjusted percentage point difference = 0.29 [0.27, 0.31]). This tripling of mask usage was sustained during the intervention period and two weeks after. Physical distancing increased from 24.1% in control villages to 29.2% in treatment villages (adjusted percentage point difference = 0.05 [0.04, 0.06]). After 5 months, the impact of the intervention faded, but mask-wearing remained 10 percentage points higher in the intervention group.
The proportion of individuals with COVID-like symptoms was 7.62% (N=13,273) in the intervention arm and 8.62% (N=13,893) in the control arm. Blood samples were collected from N=10,952 consenting, symptomatic individuals. Adjusting for baseline covariates, the intervention reduced symptomatic seroprevalence by 9.3% (adjusted prevalence ratio (aPR) = 0.91 [0.82, 1.00]; control prevalence 0.76%; treatment prevalence 0.68%). In villages randomized to surgical masks (n = 200), the relative reduction was 11.2% overall (aPR = 0.89 [0.78, 1.00]) and 34.7% among individuals 60+ (aPR = 0.65 [0.46, 0.85]). No adverse events were reported.
Conclusions: Our intervention demonstrates a scalable and effective method to promote mask adoption and reduce symptomatic SARS-CoV-2 infections.
Recent literature suggests the power of interventions to change habits. In a dense slum in Nairobi, we adopt best practices from the habit literature to encourage toilet use instead of alternatives that damage community health. Offering subsidies increased toilet usage, effects continue for one month after discounts end, but erode thereafter. Treatments designed to induce habit formation (marketing, time-limited discounts encouraging repetition, discounts for longer periods, targeting `habitual types’) generated no greater persistence. We see some persistent behavior change due to learning about the new toilet option. It appears difficult to induce pro-social behavior without private benefits through habit change.
We document that an experimental intervention offering transport subsidies for poor rural households to migrate seasonally in Bangladesh improved risk sharing. A theoretical model of endogenous migration and risk sharing shows that the effect of subsidizing migration depends on the underlying economic environment. If migration is risky, a temporary subsidy can induce an improvement in risk sharing and enable profitable migration. We estimate the model and find that the migration experiment increased welfare by 12.9%. Counterfactual analysis suggests that a permanent, rather than temporary, decline in migration costs in the same environment would result in a reduction in risk sharing.
We document that an experimental intervention offering transport subsidies for poor rural households to migrate seasonally in Bangladesh improved risk sharing. A theoretical model of endogenous migration and risk sharing shows that the effect of subsidizing migration depends on the underlying economic environment. If migration is risky, a temporary subsidy can induce an improvement in risk sharing and enable profitable migration. We estimate the model and find that the migration experiment increased welfare by 12.9%. Counterfactual analysis suggests that a permanent, rather than temporary, decline in migration costs in the same environment would result in a reduction in risk sharing.
Attempts to curb undesired behavior through regulation gets complicated when agents can adapt to circumvent enforcement. We test a model of enforcement with learning and adaptation, by auditing vendors selling illegal fish in Chile in a randomized controlled trial, and tracking them daily using mystery shoppers. Conducting audits on a predictable schedule and (counter-intuitively) at high frequency is less effective, as agents learn to take advantage of loopholes. A consumer information campaign proves to be almost as cost-effective and curbing illegal sales, and obviates the need for complex monitoring and policing. The Chilean government subsequently chooses to scale up this campaign.