The Carneiro et al (2019) working paper investigates the effect of unconditional monthly transfers and information-based support on early life child development. It uses a randomised control trial in Northern Nigeria, and it shows numerous health, human capital, and resource-based improvements for treated households.
Why is early life intervention important?
Poor nutrition and repeated infections during the first years of a child’s life have been found to have detrimental negative effects on its long-term physical and brain development. In fact, Richter et al (2017) estimate that this could contribute to children losing up to a quarter of their income-generating potential as adults. To make things worse, this problem is widespread: Grantham-McGregor et al. (2007) approximate that two-thirds of children in Sub-Saharan Africa are either stunted or growing up in extreme poverty. In fact, Richter et al (2017) estimate that the resultant loss in GDP can be double the total amount spent on healthcare. While child development is a goal in itself, these calculations indicate that early life interventions can provide a sizeable and cost-effective boost to human capital accumulation, simply by preventing its destruction.
What was the paper’s methodology?
In the Carneiro et al (2019) working paper, 3,600 pregnant women in Northern Nigeria were selected and placed in a support scheme. Treatment was randomly assigned to two-thirds of the evaluated 210 villages, with the rest being used as controls. The support scheme had two parts, both of which were simultaneously provided to the treated households. These are the following:
Resource-based support: women were given a US$22 per month unconditional monthly transfer until the child was two years old. This corresponds to 85% of the women’s monthly earning or 26% of her monthly food expenditures.
Information-based support: locally hired volunteers would deliver helpful child-rearing information. For example, mothers were advised to only breastfeed the baby for the first six months of its life, due to the high likelihood their water was polluted.
The researchers investigated the intervention’s impact on the child’s health and household consumption two years and four years after the intervention was completed. In other words when the child was four and six years old.
What were the study’s key findings?
Supported families experienced considerable childhood development improvements when compared to the non-supported ones. Some of these benefits are outlined in Figure 1 below, where they are attributed to the scheme’s aspect that caused them.
Figure 1: Key results from the resource-based and information-based interventions
Note: percentages are the probability of an effect occurring in a supported household versus a non-supported one. For example, mothers under the intervention scheme were 86% more likely to obtain antenatal care compared to mothers outside the scheme.
Did the scheme pay for itself?
Even though the paper does not investigate the scheme’s impact on total economic activity, it does capture a resource multiplier effect. More specifically, women chose to invest part of their added income into livestock rearing and petty trading. These changes were estimated to increase women’s earnings by 20% both two years and four years post-intervention. The program, therefore, improved the child’s human capital, as well as endogenously generated higher resource flows into the household. It, therefore, generated more value than it originally injected through the cash transfers.
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