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Does alleviating poverty increase cognitive performance? Short- and long-term evidence from a randomized controlled
Barnabas Szaszi1, Bence Palfi2, Gabor Neszveda3
1Institute of Psychology, ELTE, Eotvos Lorand University, Budapest, Hungary.
Summary
Unconditional cash transfers had a small, inconclusive impact on cognitive performance in Liberia. Effects on executive functions were smaller than expected and varied across measures.
Area of Science:
- Behavioral Economics
- Cognitive Neuroscience
- Developmental Economics
Background:
- Poverty alleviation programs aim to improve socioeconomic status.
- Cognitive performance is crucial for individual and societal development.
- Unconditional cash transfers (UCTs) are a prominent poverty reduction strategy.
Purpose of the Study:
- To investigate the causal impact of UCTs on cognitive performance.
- To assess both short-term and long-term effects of cash transfers.
- To compare findings with previous non-randomized studies.
Main Methods:
- Randomized controlled trial (RCT) in Liberia with low-income, high-risk individuals.
- Intervention group received a $200 lump-sum unconditional cash transfer.
- Cognitive performance assessed using executive function measures at short-term and long-term follow-ups.
Main Results:
- Observed effect sizes for cash transfers on cognitive performance were smaller than prior research suggested.
- Short-term effect size (b = .13) and long-term effect size (b = .08) were inconclusive based on Bayesian analyses.
- Multiverse analysis indicated results were not consistently altered by alternative analytical specifications.
Conclusions:
- Evidence for a significant impact of UCTs on cognitive performance in this context is inconclusive.
- Cash transfers may differentially affect various subcomponents of executive function.
- Findings highlight the importance of rigorous RCTs in evaluating social interventions.
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