Great Expectations: Responses to Current and Future Transfers for Low-Income Individuals

Achyuta Adhvaryu, Gauthier, Jean-François, Pamela Jakiela and Dean Karlan

No 21174, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: How does the expectation of aid change behavior? We propose a simple approach to separate expectations effects from the direct effects of relaxing resource constraints: compare the promise of a program to the program itself. We test this approach in a four-arm randomized controlled trial of cash transfers in Uganda. Both those who received cash and those promised-to-receive cash increase their labor supply and investment. Immediate transfers also increase household expenditures and savings. Our results are not consistent with standard life-cycle models; they are better explained by a model in which the transfer increases individual labor productivity.

Keywords: Uganda (search for similar items in EconPapers)
JEL-codes: D15 J22 O12 (search for similar items in EconPapers)
Date: 2026-02
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