An experiment on providing the ultra-poor in Northern Uganda with cash transfers combined with other services demonstrated large economic gains for the recipients. After receiving basic skills training, a $150 cash transfer, follow-up visits and a group dynamics training, the beneficiaries’ individual cash earnings rose by 95%.
The proportion of beneficiaries with non-farm businesses doubled, household consumption rose by a third and employment rose from 15 to 24 hours per week. Although economic gains were similar for women and men, women’s autonomy did not increase and domestic violence did not decrease.
Given the high returns on cash transfers, this research demonstrates that cash transfers can be a highly cost-effective way of alleviating poverty. More research on the long-term effects of the cash transfers is needed.