Studies have shown that large, unconditional cash transfers reduce poverty and improve quality of life, at least in the short run. However little is known about the effects of large cash transfers in contexts of protracted displacement.
On World Refugee Day GIF partners GiveDirectly and IDinsight report on the impact of a one-time cash transfer of $1,000 on refugees in Uganda amid COVID-19, with the evaluation showing that – even amidst the COVID-19 pandemic and cuts to the monthly World Food Programme cash/food aid – refugees in the Kiryandongo refugee settlement effectively used the cash transfer to improve their economic and psychological wellbeing.
Miriam Laker-Oketta, GiveDirectly Research Director, reports on how refugees can build independence with cash aid.
Worldwide, over 26 million people have fled their country of birth and today live as refugees, often in conditions of insecurity and deprivation. Despite hundreds of studies showing the positive impact of direct cash aid on people in poverty, only a few focused on refugees (1, 2) and no large experimental study had been conducted on the impact of large cash transfers for refugees in a protracted setting.
Findings from a randomised controlled trial of our program in Uganda’s Kiryandongo protracted refugee settlement show strong positive impacts two years after households received $1,000 in unconditional cash aid. Below we breakdown these results and the implications it can have for how organisations and governments support long term refugees worldwide.
Two years after a $1,000 payment, refugees were more likely to have grown assets and income
The Kiryandongo refugee settlement in Uganda hosts ~75,500 refugees, most of whom have fled sustained violence in South Sudan. These families are part of a “protracted displacement,” living as refugees for prolonged time periods because the crisis that led to their displacement is ongoing.
In 2019, GiveDirectly initiated a program to give $1,000 transfers to all ~10,000 households in the settlement and ~5,000 Ugandan households from the surrounding community. Researchers from IDinsight selected 1,090 households from the settlement to participate in a randomised controlled trial to measure the effects of this payment. They compared 556 households that received the funds to 534 in a control group from a cohort that would not yet have received funds by the end of the study.
Researchers conducted a survey of outcomes in mid-2020 to study the impact of cash on households during pandemic lockdowns (results here) and a final survey in the spring of this year ~2 years after payments. Here are the findings of the evaluation in full.
Spending increased by $35/month
Two years later, households who received the funds were spending $32 USD (or 11%) more per month on goods and services compared to those who did not – also known as consumption. This is roughly the same amount as the average family spends on educational expenses in a month. However, the increase in household consumption is driven by increased consumption of food. Qualitative interviews suggested education as a key early investment priority; however COVID-19 induced a 24 month school closure, increasing food prices, and WFP aid cuts meant that families reprioritised spending to more immediate consumption needs.
Asset ownership increased by 61%
Households receiving funds owned assets worth $1,386 (or 61%) more than to those who did not. Many families invested in assets like purchasing land, home construction and improvements – adding additional rooms or installing a metal roof.
Business ownership increased by 9% and earnings increased by $14/month
The group who received funds earned $14/month (or 64%) more from businesses than those who did not. Also the portion of refugees who started non-agricultural businesses during these two years was 9% higher for those who received the funds. The most common businesses were small shops either in the market or run from their home.
Psychological well-being and self-reliance increased as well
The study also showed payments had positive effects on psychological well-being and self-reliance, both of which are measured using an index of questions. The study did not find statistically significant effects on migration, female empowerment, household composition, or employment.
These impacts are especially significant given they were realised during a pandemic
The two years in which this study was conducted have been anything but normal for the Kiryandongo residents. Around the time payments were beginning, Uganda initiated COVID-19 lockdown protocols, impacting earnings and education. At around the same time the World Food Program funding shortfalls forced them to cut the monthly food aid allocation from approximately $8.25 to $5.75 and then further to $5.05.
Seeing significant gains in business creation, asset building, and self-reliance means households were able to use the $1000 for more than just their most basic need during the pandemic. This suggests the impact of a $1,000 might be even greater in future contexts.
This study shows large cash transfers can build refugee self-reliance and help address the global refugee crisis
Humanitarian assistance alone will not lift refugees to a state of economic independence. This study illustrates that large cash transfers are a dignified way to allow refugees to meet their immediate needs while also enabling them to make significant investments in their livelihoods.
By promoting self-reliance, large cash transfers can assist in realising any of the three durable ‘solutions’ for refugee crises as outlined by UNHCR: repatriation, resettlement, and integration. However, resettlement is infrequently possible: wealthier countries accepted a record low of just 16,300 refugees worldwide last year; that’s <0.06% of all refugees and just a ¼ the size of Kiryandongo’s single settlement. Where repatriation is not viable and where host countries like Uganda allow long-term refugees to participate in markets and run businesses, large cash transfers can particularly facilitate local integration.
This improvement in self-reliance is especially meaningful In light of increasingly stretched resources for refugees globally and specifically in Uganda. Despite the launch of an emergency appeal this year by groups including UNHCR and WFP following an influx of refugees entering Uganda, only around 35% of this appeal’s financial requirements have been funded. Large cash transfers and the autonomy they permit can provide a bridge between humanitarian relief and longer-term development support, creating a potential exit strategy for refugees reliant on ongoing humanitarian aid.
Following these exciting results from Kiryandongo, GiveDirectly is looking to scale the approach within Uganda and into other contexts experiencing both an increasing number of long-term refugees, and increasing pressure on resources.
This article was originally published on the GiveDirectly blog.