Do cash transfers to poor families alleviate poverty?

Researchers Ingrid Hoem Sjursen (CMI), Charlotte Ringdal (CMI) and Ingvild Almås (NHH and Stockholm University) argue that we need to understand inequalities within families to get a proper understanding, and that the way we measure poverty often misses the target.

Extreme poverty is defined as living on less than two dollars a day. So if the numbers show that a family has more than two dollars to spend per day, does that mean that all the family members are equally well off?

Aid in the form of cash transfers is seen as an effective way of alleviating poverty. The idea is that if you give poor households money, it contributes to the entire family’s well-being. Yet, research shows that money is often not distributed equally within a family. Women and children often end up not getting an equal share of the money. To be effective in reducing poverty, aid policies have to be based on more accurate measurements of poverty, argues Hoem Sjursen, Ringdal and Almås. That is why they have started delving into questions like: Could targeted transfers to women create more equality? And would giving more money directly to women benefit children?

Read more about the ongoing research project: Intra-household resource allocation and targeted transfers

If you want to know more about intra-household inequality and how poverty is measured, check out these publications:

Understanding Inequality Within Households, in K.F. Zimmermann: Handbook of Labor, Human Resources and Population Economics. Springer, Cham. In this book chapter, the researchers discuss the importance of intra-household allocations for poverty and inequality measurement, and also the main determinants of power in household decision-making.

Understanding inequalities within households. GLO Discussion Paper. Here the researchers document that there are substantial inequalities within households in some contexts, and that these inequalities often, but not always, come at the expense of women and children.

Household Bargaining and Spending on Children: Experimental Evidence from Tanzania, in Economica. In this journal article, the researchers study whether an increase in women’s intra-household bargaining power causes couples to allocate more resources to their child’s education, and if so, what the underlying mechanisms may be.

Household bargaining and spending on children: Experimental Evidence from Tanzania, UNU-WIDER working paper. A working paper on whether increasing the wife’s bargaining power results in couples allocating more to their child.

Cash transfers and children’s wellbeing: should the money go to mom or dad? GlobalDev Blog. In this blog post the researchers discuss whether women spend more money on their children than men do.