Research

Study Overview

Firms frequently fail to adopt profitable business opportunities even when they do not face informational or liquidity constraints. We explore three behavioral frictions that explain inertia among individuals—present bias, limited memory, and distrust—in a managerial setting. In partnership with a FinTech payments company in Mexico, we randomly offer 33,978 f irms the opportunity to pay a lower merchant fee. We vary whether the offer has a deadline, reminder, pre-announced reminder, and the size of the fee reduction.

Study Results

Reminders increase take-up by 15%, suggesting a role of memory. Announced reminders increase take-up by an additional 7%. Survey data reveal the likely mechanism: When the FinTech company follows through with the pre-announced reminder, firms’ trust in the offer increases. The deadline does not affect larger firms, implying limited or no present bias, but does increase take-up by 8% for smaller firms. Overall, behavioral frictions contribute significantly to explaining profit-reducing firm behavior.

Intervention: Random variation in contract terms

Working Paper: Gertler, Paul J. and Higgins, Sean and Malmendier, Ulrike and Ojeda, Waldo, Do Behavioral Frictions Prevent Firms from Adopting Profitable Opportunities? (January 2025). NBER Working Paper No. w33387

IBSI Funding Acknowledgement: Lab for Inclusive FinTech (LIFT)

Study Overview

We study how preventive medical care use affects health behaviors and outcomes for patients with chronic diseases. Leveraging variation induced by a national appointment reminder program, rolled out across 315 public primary care clinics in Chile, we use an instrumental variables approach with patient-level administrative data from over 300,000 patients with type 2 diabetes and hypertension.

Study Results

We find that increased preventive visits lead to more screening tests and large increases in medication adherence. Preventive care also leads to earlier detection and treatment of cardiovascular complications: we document an increase in cardiovascular hospitalizations but a reduction in in-hospital mortality.

Working Paper: Boone, Claire & Pablo A. Celhay & Paul Gertler & Tadeja Gracner, 2025. "The Importance of Preventive Medical Care for Managing Chronic Disease," NBER Working Papers 33738, National Bureau of Economic Research, Inc.

Study Overview

Infant formula use has been implicated in tens of millions of infant deaths in low and middle-income countries over the past several decades, but causal evidence of its link with mortality remains elusive. We combine birth record data from over 2.6 million infants across 38 countries in the Demographic and Health Surveys (DHS) with reconstructed historical data from annual investor reports on the timing of Nestlé entrance into infant formula country markets.

Study Results

Consistent with the hypothesis that formula mixed with unclean water could act as a disease vector, we find that infant mortality increased in households with unclean water sources by 19.4 per thousand births following Nestlé market entrance, but had no effect among other households. This rate is equivalent to a 27% increase in mortality in the population using unclean water and amounts to about 212,000 excess deaths per year at the peak of the Nestlé controversy in 1981.

Intervention: Infant formula

Working Paper: Jesse K. Anttila-Hughes & Lia C.H. Fernald & Paul J. Gertler & Patrick Krause & Eleanor Tsai & Bruce Wydick, 2025. "Mortality from Nestlé’s Marketing of Infant Formula in Low and Middle-Income Countries," NBER Working Papers 24452, National Bureau of Economic Research, Inc.

Study Overview

Pay-as-you-go (PAYGo) financing is a novel contract that has recently become a popular form of credit, especially in low- and middle-income countries (LMICs). PAYGo financing relies on lockout technology that enables the lender to remotely disable the flow benefits of collateral when the borrower misses payments. This paper quantifies the welfare implications of PAYGo financing. We develop a dynamic structural model of consumers and estimate the model using a multi-arm, large scale pricing experiment conducted by a fintech lender that offers PAYGo financing for smartphones.

Study Results

We find that the welfare gains from access to PAYGo financing are equivalent to a 3.4% increase in income while remaining highly profitable for the lender. The welfare gains are larger for low-risk consumers and consumers in the middle of the income distribution. Under reasonable assumptions, PAYGo financing outperforms traditional secured loans for all but the riskiest consumers. We explore contract design and identify variations of the PAYGo contract that further improve welfare.

Intervention: Randomized variations in interest rates and minimum downpayment requirement

Working Paper: Paul J. Gertler & Brett Green & Renping Li & David Sraer, 2025. "The Welfare Benefits of Pay-As-You-Go Financing," NBER Working Papers 33484, National Bureau of Economic Research, Inc.

IBSI Funding Acknowledgement: Lab for Inclusive FinTech (LIFT)

Study Overview

A form of secured lending using “digital collateral” has recently emerged, most prominently in low- and middle-income countries. Digital collateral relies on lockout technology which allows the lender to temporarily disable the flow value of the collateral to the borrower without physically repossessing it. This research explores this form of credit in a model and a field experiment using school-fee loans digitally secured with a solar home system.

Study Results

Securing a loan with digital collateral drastically reduced default rates (by 19 percentage points) and increased the lender’s rate of return (by 49 percentage points). Using a variant of the Karlan and Zinman (2009) methodology, we decompose the total effect on repayment and find that roughly two-thirds is attributable to moral hazard, and one-third to adverse selection. In addition, access to digitally secured school-fee loans significantly increased school enrollment and school-related expenditures without detrimental effects on households’ balance sheets.

Intervention: Household loans relying on digital collateral using PayGo technology

Intervention Partner: Fenix International (now ENGIE)

Working Paper: Paul J. Gertler & Brett Green & Catherine Wolfram, 2021. "Digital Collateral," NBER Working Papers 28724, National Bureau of Economic Research, Inc.

Journal Publication: Paul J. Gertler, Brett Green, Catherine Wolfram, Digital Collateral, The Quarterly Journal of Economics, Volume 139, Issue 3, August 2024, Pages 1713–1766, https://doi.org/10.1093/qje/qjae003

IBSI Funding Acknowledgement: Lab for Inclusive FinTech (LIFT)

Study Overview

Does combating corruption reduce clientelism? We examine the impact of a prominent anti-corruption program on clientelism using a novel representative survey of rural Brazilians.

Study Results

Randomized audits reduce politicians’ provision of campaign handouts, decrease citizens’ demands for private goods, and reduce requests fulfilled by politicians. We investigate mechanisms by which audits may reduce clientelism, and find that audits significantly reduce citizens’ willingness to supply clientelist votes. Results also offer novel insights into audits’ dynamic effects: they have more pronounced effects in the short run, especially during electoral periods.

Working Paper: Gustavo J. Bobonis & Paul J. Gertler & Marco Gonzalez-Navarro & Simeon Nichter, 2024. "Does Combating Corruption Reduce Clientelism?," NBER Working Papers 31266, National Bureau of Economic Research, Inc.

Study Overview

We examined the impact of exposure to sugar restrictions within 1000 days after conception on type 2 diabetes and hypertension, leveraging quasi-experimental variation from the end of the United Kingdom’s sugar rationing in September 1953. Rationing restricted sugar intake to levels within current dietary guidelines, and consumption nearly doubled immediately after rationing ended.

Study Results

Using an event study design with UK Biobank data comparing adults conceived just before or after rationing ended, we found that early-life rationing reduced type 2 diabetes and hypertension risk by about 35 and 20% and delayed disease onset by 4 and 2 years, respectively. Protection was evident with in utero exposure and increased with postnatal sugar restriction, especially after 6 months, when eating of solid foods likely began. In utero sugar rationing alone accounted for about one-third of the risk reduction.

Journal Publication: Tadeja Gracner et al. ,Exposure to sugar rationing in the first 1000 days of life protected against chronic disease.Science386,1043-1048(2024).DOI:10.1126/science.adn5421

Study Overview

Some evidence suggests that there are significant gender gaps in early child development in low- and middle-income countries, with girls generally outperforming boys. However, few studies have tested for the existence of such gaps at a large scale. Our objective is to examine gender disparities in early child development in Brazil, Chile, Colombia, India, Indonesia, Nicaragua, Peru, Senegal, and Uruguay, with 26,055 children aged 7 to 48 months. We estimate gaps using cross-sectional studies with language, socioemotional, and motor skills development assessments.

Study Results

Consistent with small-sample findings, the data shows girls consistently outperformed boys on language tests (0.14 standard deviations) and socioemotional development (0.17 standard deviations), with differences consistent across all nine countries. There were no systematic differences by gender for motor development. We explored how family characteristics, health investments, or parent–child interactions influenced the gap. We did not find evidence that variation on these characteristics across children explained the gap. Our findings suggest that gender gaps in language and socioemotional development emerge very early in life.

Journal Publication: Bando, R., Lopez-Boo, F., Fernald, L. et al. Gender Differences in Early Child Development: Evidence from Large-Scale Studies of Very Young Children in Nine Countries. J Econ Race Policy 7, 82–92 (2024). https://doi.org/10.1007/s41996-023-00131-1

Study Overview

Despite the promise of FinTech lending to expand access to credit to populations without a formal credit history, FinTech lenders primarily lend to applicants with a formal credit history and rely on conventional credit bureau scores as an input to their algorithms.

Study Results

Using data from a large FinTech lender in Mexico, we show that alternative data from digital transactions through a delivery app are effective at predicting creditworthiness for borrowers with no credit history. We also show that segmenting our machine learning model by gender can improve credit allocation fairness without a substantive effect on the model’s predictive performance.

Intervention: AI model that differentiates creditworthiness between men and women

Intervention Partner: RappiCard

Working Paper: Laura Chioda & Paul J. Gertler & Sean Higgins & Paolina C. Medina, 2024. "FinTech Lending to Borrowers with No Credit History," NBER Working Papers 33208, National Bureau of Economic Research, Inc.

IBSI Funding Acknowledgement: Lab for Inclusive FinTech (LIFT)

Study Overview

We examine the effect of performance monitoring in public procurement through the lens of organizational culture in a principal-agent model where the manager (principal) and buyers (agents) may have different beliefs about how much the government values efficiency. We show that the effect of performance information not only increases efficiency but is greater when the buyer’s belief is stronger than the manager’s belief. We leverage a new e-procurement system in Chile to test these ideas by randomizing monthly reports on the purchasing performance of buyers and further whether the individual performance reports were disclosed to managers.

Study Results

We find that the reports generated sizable reductions in overspending — with savings reaching a 15% reduction or 0.1% of GDP — but only when individual performance was observable to managers. This is consistent with extrinsic motivation rather than intrinsic motivation driving buyer behavior. Consistent with the theoretical model, we also find that the gain in efficiency is concentrated in procurement units where buyer belief that the government cares about efficiency is stronger than manager belief. Our results highlight the key role played by organizational culture in mediating the impact of purchasing performance information on preventing the misuse of public resources.

Intervention: E-procurement platform and performance monitoring

Working Paper: Pablo A. Celhay & Paul J. Gertler & Marcelo Olivares & Raimundo Undurraga, 2024. "How Managers Can Use Purchaser Performance Information to Improve Procurement Efficiency," NBER Working Papers 32141, National Bureau of Economic Research, Inc.

Study Overview

This paper estimates the local welfare impacts of highway maintenance investments. We instrument road quality exploiting Indonesia’s two-step budgeting process for allocating funding to local road authorities.

Study Results

Using comprehensive data on road quality from 1990–2007, we find evidence that better roads help manufacturers create new jobs, enabling worker transitions out of informal employment, and increasing labor income. Road quality also changes the cost of living, reducing perishable food prices but also raising housing prices. We estimate the elasticity of household welfare with respect to road quality to be 0.1 and the benefit/cost ratio for road maintenance investments to be 2.3.

Intervention: Road upgrades

Journal Publication: Gertler, Paul J., Marco Gonzalez-Navarro, Tadeja Gračner, Alexander D. Rothenberg, 2024. "Road maintenance and local economic development: Evidence from Indonesia’s highways," Journal of Urban Economics, vol 143. https://doi.org/10.1016/j.jue.2024.103687

Study Overview

Patients rely on medical care providers to act in their best interests because providers understand disease pathology and appropriate treatment much better than patients. Providers, however, not only give advice (diagnose) but also deliver (sell) treatments based on that advice. This creates a moral hazard dilemma where provider financial interests can diverge from patient interests, especially when providers are motivated more by profits than by altruism. We investigate how profit motivated versus altruistic preferences influence medical care decision making in the context of malaria in Kenya. We measured the appropriateness of care using data from an audit study that employed standardized patients (SP) who were trained to present as real patients the identical clinical case scenario to providers. The SPs were confirmed to be malaria negative before and after field work with a very reliable and sensitive blood test at a high-quality laboratory. We measured provider preferences using a lab in the field, real stakes, modified version of the dictator game.

Study Results

We find that more profit-motivated providers report higher rates of false-positive malaria test results than do more altruistic providers. Specifically, purely profit motivated providers report 30 percentage points more positives than providers who are altruistically motivated, and providers likely knew that the positive results that they reported to their patients were false. We also find that more profit motivated providers sold more unnecessary antimalarial drugs than did more altruistic providers. Based on mediation analysis, more profit-oriented providers sold more drugs not only because they knowingly reported more false positives, but also because they promoted drugs sales more conditional on a positive test result. Thus, profit motivated providers seem to have misrepresented test results to sell more unnecessary malaria-related drugs.

Working Paper: Paul J. Gertler & Ada Kwan, 2024. "The Essential Role of Altruism in Medical Decision Making," NBER Working Papers 32151, National Bureau of Economic Research, Inc.

Study Overview

We examine whether a diagnosis contingent incentive contract structure improves the treatment of malaria, and whether it’s best to target those incentives to patients or providers. The contract provides incentives to use rapid tests (RDTs) to diagnose patient malaria status combined with incentives to treat with antimalarial drugs (ACTs) if the patient tests positive but not if negative.

Study Results

Using data from a cluster randomized field experiment with 140 pharmacies in malaria endemic regions of Kenya, we find that both patient subsidies and provider incentives significantly increased RDT testing uptake. Absent incentives, 87% of suspected malaria patients purchase ACTs, of which as many as 66% are doing so unnecessarily because they do not have malaria. The incentives lead to an increase RDT test use by 25 pp, a 7 pp increase in the purchase of ACTs by malaria positive patients, and a 27 pp decline in the purchase of ACTs by malaria negative patients. The contract increases (decreases) ACTs for those who are malaria positive (negative) through both improved diagnostic information and incentives. Diagnosiscontingent contracts are highly cost effective, actually lowering the cost per malaria positive person being treated by reducing the unnecessary treatment of malaria negative patients.

Intervention: Diagnostic-contingent incentive contract

Intervention Partner: Maisha Meds

Working Paper: Maria Dieci & Paul J. Gertler & Jon Kolstad & Carlos Paramo, 2024. "Using Diagnosis Contingent Incentives to Improve Malaria Treatment"

Study Overview

Private sector engagement in health reform has been suggested to help reduce healthcare inequities in sub-Saharan Africa, where populations with the most need seek the least care. We study the effects of African Health Markets for Equity (AHME), a cluster randomized controlled trial carried out in Kenya from 2012 to 2020 at 199 private health clinics. AHME included four clinic-level interventions: social health insurance, social franchising, SafeCare quality-of-care certification programme and business support. This paper evaluates whether AHME increased the capacity of private health clinics to serve poor clients while maintaining or enhancing the quality of care provided.

Study Results

At endline, clinics that received AHME were 14.5 percentage points (pp) more likely to be empanelled with the National Health Insurance Fund (NHIF), served 51% more NHIF clients and served more clients from the middle three quintiles of the wealth distribution compared to control clinics. Comparing individuals living in households near AHME treatment and control clinics (N = 8241), AHME led to a 6.7-pp increase in the probability of holding any health insurance on average. We did not find any additional effect of AHME on insurance holding among poor households. We measured quality of care using a standardized patient (SP) experiment (N = 596 SP–provider interactions) where recruited and trained SPs were randomized to present as either ‘not poor’, and able to afford all services provided, or ‘poor’ by telling the provider they could only afford ∼300 Kenyan Shillings (US$3) in fees. We found that poor SPs received lower levels of both correct and unnecessary services, and AHME did not affect this. More work must be done to ensure that clients of all wealth levels receive high-quality care.

Journal Publication: Boone, Claire E., Paul J. Gertler, Grace Makana Barasa, Joshua Gruber, Ada Kwan, Can a private sector engagement intervention that prioritizes pro-poor strategies improve healthcare access and quality? A randomized field experiment in Kenya, Health Policy and Planning, Volume 38, Issue 9, November 2023, Pages 1006–1016, https://doi.org/10.1093/heapol/czad076

Study Overview

We test two ways to improve revenue collection efficiency for water and sanitation utilities: (i) face-to-face engagement between utility staff and customers and (ii) contract enforcement for service disconnection due to nonpayment in the form of transparent and credible disconnection notices. Engagement has no effect, while enforcement significantly increases payment.

Study Results

We find no effect on access to water, perceptions of the utility, relationships between tenants and property owners, or on tenant mental well-being nine months after the intervention. These results suggest that transparent contract enforcement was effective at improving revenue collection efficiency without incurring significant observed social or political costs.

Journal Publication: Aidan Coville, Sebastian Galiani, Paul J. Gertler, Susumu Yoshida; Financing Municipal Water and Sanitation Services in Nairobi's Informal Settlements. The Review of Economics and Statistics 2023; doi: https://doi.org/10.1162/rest_a_01379

Study Overview

Exploiting the end of the post-WWII rationing of sugar and sweets in 1953 in the United Kingdom, we used a regression discontinuity design to measure impacts of sugar-rich diet early in life.

Study Results

We show large adverse effects on the health and economic well-being of adults more than fifty years later. Excessive sugar intake early in life led to higher prevalence of chronic inflammation, diabetes, elevated cholesterol and arthritis. It also decreased post-secondary schooling, having a skilled occupation, and accumulating above median wealth. We identified elevated sugar consumption across lifespan as a likely pathway of impact.

Working Paper: Paul J. Gertler & Tadeja Gracner, 2022. "The Sweet Life: The Long-Term Effects of a Sugar-Rich Early Childhood," NBER Working Papers 30799, National Bureau of Economic Research, Inc.

Study Overview

Despite the importance of deposit financing for lending, banks in developing countries struggle to attract deposits.

Study Results

In a randomized experiment across 110 bank branches throughout Mexico, a lottery incentive based on net monthly deposits caused a 40% increase in the number of accounts opened and a 21% increase in the number of deposits during the lottery months. Nearly all new accounts (96%) were opened by households previously unbanked at any bank. The temporary two-month incentive had a persistent 2-3 year impact on the flow of deposits and stock of savings, and increased the present value of branch profits by 6%.

Intervention: Financial incentive

Working Paper: Paul J. Gertler & Sean Higgins & Aisling Scott & Enrique Seira, 2023. "Using Lotteries to Attract Deposits," NBER Working Papers 31529, National Bureau of Economic Research, Inc.

Study Overview

Public expenditures on non-contributory pensions are equivalent to at least 1 percent of GDP in several countries in Latin America and is expected to increase. We explore the effect of non-contributory pensions on the well-being of the beneficiary population by studying the Pensiones Alimentarias program established by law in Paraguay, which targets older adults living in poverty.

Study Results

The program improved subjective well-being in 0.48 standard deviations. Households with a beneficiary increased their level of consumption by 44 percent. These effects are consistent with the findings of Bando, Galiani and Gertler (2020) and Galiani, Gertler and Bando (2016) in their studies on the non-contributory pension schemes in Peru and Mexico. Thus, we conclude that the effects of non-contributory pensions on well-being in Paraguay are comparable to those found for Peru and Mexico and add to the construction of external validity.

Journal Publication: Bando, Rosangela, Sebastian Galiani, Paul J. Gertler. 2022. "Another brick on the wall: On the effects of non-contributory pensions on material and subjective well being", Journal of Economic Behavior & Organization, Volume 195, https://doi.org/10.1016/j.jebo.2021.12.029.

Study Overview

Several governments are considering taxes on non-essential energy-dense, high calorie foods (NEDF) to increase their prices and thereby encourage better diet and health. Alongside a tax on sugary drinks in January 2014, Mexico implemented such a tax: an 8 percent ad-valorem tax on NEDF, defined as those with energy density equal or larger than 275 kcal/100 g. We study the changes in the prices of taxed and tax-exempt foods following this tax both on average and by tax-eligible foods across store types and cities, using monthly price data between 2012 and 2016.

Study Results

We compare within-product price changes before and after the tax adjusting for product fixed effects, seasonality, and trends, and find that prices of taxed foods increased by 4.8 % on average, but differentially across foods. Prices of candies, cookies and packaged pastries increased by eight or more percent post-tax (vs pre-tax); prices of cakes, and savory snacks increased by less. Prices of fresh pastry and ready-to-eat cereal increased, but only in 2014. Prices of chocolate and pizza did not increase after the tax. For tax-exempt foods, no significant price changes were observed. Variability in price changes for taxed foods were observed by cities as well as by stores: increases were larger in supermarkets compared to smaller grocery stores on average and for most foods. Differences in how prices changed across foods, cities and stores have implications for who is likely to be affected by the tax and how tax effects on diet may vary due to the differential tax pass-through in addition to a heterogenous demand response to changed prices.

Journal Publication: Gračner, Tadeja, Kandice A. Kapinos, Paul J. Gertler. 2022. "Associations of a national tax on non-essential high calorie foods with changes in consumer prices", Food Policy, Volume 106, https://doi.org/10.1016/j.foodpol.2021.102193.

Study Overview

Low and varied quality of care has been demonstrated for childhood illnesses in low-income and middle-income countries. Some quality improvement strategies focus on increasing patient engagement; however, evidence suggests that patients demanding medicines can favour the selection of resistant microbial strains in the individual and the community if drugs are inappropriately used. This study examines the effects on quality of care when patients demand different types of inappropriate medicines.

Study Results

Compared with 3% among those who did not demand albendazole, the dispensing rate increased significantly to 34% for those who did (adjusted OR 0.06, 95% CI 0.02 to 0.22, p<0.0001). Providers did not give different levels of amoxicillin between those demanding it and those not demanding it (adjusted OR 1.73, 95% CI 0.51 to 5.82). Neither significantly changed any correct management outcomes, such as treatment or referral elsewhere. Private providers appear to account for both business-driven benefits and individual health impacts when making prescribing decisions. Additional research is needed on provider knowledge and perceptions of profit and individual and community health trade-offs when making prescription decisions after patients demand different types of inappropriate medicines.

Journal Publication: Kwan A, Boone CE, Sulis G, Gertler PJ. Do private providers give patients what they demand, even if it is inappropriate? A randomised study using unannounced standardised patients in Kenya. BMJ Open. 2022 Mar 18;12(3):e058746. doi: 10.1136/bmjopen-2021-058746. PMID: 35304401; PMCID: PMC8935168.

Study Overview

In this paper, we explore how technologies from new players in fintech differ from traditional financial services in the problems they solve, requirements for success at-scale, and unintended consequences. We highlight key questions from the academic literature that have already been addressed and those that are outstanding. While we focus on applications for consumers in developing countries, we also draw on insights from examples in developed economies that may serve as both potential areas of opportunity and pitfalls to avoid.

Study Results

First, we discuss how new players aim to increase access to financial services for those outside of the traditional banking systems, build new technologies and infrastructure to lower costs, and even create new markets to solve problems not addressed with traditional financial services. With large dispersion in the sources of innovation, each of these new players is approaching these problems in unique ways. To have any real impact on consumers, these fintech technologies must be brought to scale. While the large number of new players has been critical for innovation, it has made the challenge of scalability that much harder. Not only does the number of players increase direct competition between fintech solutions, but the fragmented nature of the market makes it difficult to establish trust, proper regulatory oversight, and the necessary infrastructure. While these technologies have a lot of potential benefit for consumers, they are not without consequences. Increased financial access has clear benefits, but it poses a challenge when bringing in less technically or financially sophisticated consumers. As access is expanded, consumers should be empowered to make informed decisions and avoid security risks. Removing frictions in financial markets can improve efficiency, but it also allows consumers to act more impulsively. We also discuss how new markets can lead to novel behaviors or a resurfacing of traditional challenges in finance, highlighting the need for careful research on the implications of these new players. Beyond the direct benefits and consequences for consumers, fintech can have broader impacts on markets, prices, intra-household dynamics, mobility, and even the environment. The paper concludes with a discussion of these broader impacts.

Working Paper: Chioda, Laura and Gertler, Paul J. and Macdonald, Isabel and Wellsjo, Alexandra, New Players in Fintech Markets (February 24, 2022). Available at SSRN: https://ssrn.com/abstract=

IBSI Funding Acknowledgement: Lab for Inclusive FinTech (LIFT)

Study Overview

In this review, we discuss changes resulting from both big data and non-traditional data in the financial industry. We explore ways these innovations are shaping markets and companies, but put greater focus on the consequences – both positive and negative – for end consumers. We aim to cast a wide net over offerings for both developed and emerging markets, as well as both products aimed at low-income, low-literacy individuals and those intended for more educated, wealthy, and financially savvy consumers.

Study Results

Analysis suggests there are many promises and potential risks – such as discrimination caused by bias in data used for credit scoring or consumers’ behavior to game systems – related to data-driven fintech innovation. In many cases, better oversight and further research can help to address the concerns and ensure benefits are more widely distributed. As these technologies become more ubiquitous, the challenge will be for regulation and rigorous evaluation of impacts to keep pace with rising innovation.

Working Paper: Chioda, Laura and Gertler, Paul and Macdonald, Isabel and Wellsjo, Alexandra, Novel Use of Data in Fintech (June 02, 2022). Available at SSRN: https://ssrn.com/abstract=

IBSI Funding Acknowledgement: Lab for Inclusive FinTech (LIFT)

Study Overview

Public expenditures on non-contributory pensions are equivalent to at least 1 percent of GDP in several countries in Latin America and is expected to increase. We explore the effect of noncontributory pensions on the well-being of the beneficiary population by studying the Pensiones Alimentarias program established by law in Paraguay, which targets older adults living in poverty.

Study Results

Households with a beneficiary increased their level of consumption by 44 percent. The program improved subjective well-being in 0.48 standard deviations. These effects are consistent with the findings of Bando, Galiani and Gertler (2020) and Galiani, Gertler and Bando (2016) in their studies on the non-contributory pension schemes in Peru and Mexico. Thus, we conclude that the effects of non-contributory pensions on well-being in Paraguay are comparable to those found for Peru and Mexico and add to the construction of external validity.

Journal Publication: Bando, Rosangela, Sebastian Galiani, and Paul J. Gertler. 2022. “Another Brick on the Wall: On the Effects of Non-contributory Pensions on Material and Subjective Well Being.” Journal of Economic Behavior and Organization 195: 16–26.

Study Overview

We examine the impacts of a sanitation program designed to eliminate open defecation in at-scale randomized field experiments in four countries: India, Indonesia, Mali, and Tanzania. The programs – all variants of the widely-used Community-Led Total Sanitation (CLTS) approach – increase village private sanitation coverage in all four locations by 7–39 percentage points. We use the experimentally-induced variation in access to sanitation to identify the causal relationship between village sanitation coverage and child height.

Study Results

We find evidence of threshold effects where increases in child health of 0.3 standard deviations are realized once village sanitation coverage reaches 50–75%. There do not appear to be further gains beyond this threshold. These results suggest that there are large health benefits to achieving coverage levels well below the 100% coverage pushed by the CLTS movement. Open defecation decreased in all countries through improved access to private sanitation facilities, and additionally through increased use of sanitation facilities in Mali who implemented the most intensive behavior change intervention.

Journal Publication: Cameron, Lisa, Paul J. Gertler, Manisha Shah, Maria Laura Alzua, Sebastian Martinez, Sumeet Patil. 2022. "The dirty business of eliminating open defecation: The effect of village sanitation on child height from field experiments in four countries". Journal of Development Economics, Volume 159, https://doi.org/10.1016/j.jdeveco.2022.102990.

Study Overview

While bank accounts play a crucial role in everyday economic activities in high-income countries, fewer than 40% of the households in low-and middle-income countries (LMIC) have one. Instead, most poor households rely on informal, costly and risky alternatives and would benefit from access to a range of the financial services offered by formal institutions. Savings, in particular, facilitate investment in productive activities, education and household durables, and help smooth out income shocks. In light of these advantages, many LMIC governments and international organizations have set themselves the goal of improving these population groups’ access to formal financial institutions. One reason why poor households may not keep their savings in a bank account is that they do not trust that the money will be available to them when they want it. Trust is an essential element of economic transactions and an important driver of economic development.

Study Results

We randomly assigned beneficiaries of a conditional cash transfer program in Peru to attend a 3 h training session designed to build their trust in financial institutions. We find that the intervention: (a) increased trust in banks, but had no effect on financial literacy, and (b) increased savings over a ten month period. The increase in savings represents a 1.4 percentage point increase in the savings rate out of the cash transfer deposits, and a 0.4 percentage point increase in the savings rate out of household income.

Intervention: Training

Working Paper: Sebastian Galiani & Paul J. Gertler & Camila Navajas Ahumada, 2020. "Trust and Saving in Financial Institutions by the Poor," NBER Working Papers 26809, National Bureau of Economic Research, Inc.

Journal Publication: Galiani, Sebastian & Gertler, Paul & Navajas-Ahumada, Camila. (2022). Trust and saving in financial institutions by the poor. Journal of Development Economics. 159. 102981. 10.1016/j.jdeveco.2022.102981.

Study Overview

This study argues that economic vulnerability causes citizens to participate in clientelism, a phenomenon with various pernicious consequences. To examine how reduced vulnerability affects citizens’ participation in clientelism, we employ two exogenous shocks to vulnerability. First, we designed a randomized control trial to reduce household vulnerability: our development intervention constructed residential water cisterns in drought-prone areas of Brazil. Second, we exploit rainfall shocks.

Study Results

We find that reducing vulnerability significantly decreases requests for private goods from politicians, especially among citizens likely to be in clientelist relationships. Moreover, reducing vulnerability decreases votes for incumbent mayors, who typically have more resources for clientelism.

Journal Publication: Bobonis, Gustavo J., Paul J. Gertler, Marco Gonzalez-Navarro, and Simeon Nichter. 2022. "Vulnerability and Clientelism." American Economic Review 112 (11): 3627–59. DOI: 10.1257/aer.20190565

Study Overview

As global temperatures go up and incomes rise, air conditioner sales are poised to increase dramatically. Recent studies explore the potential economic and environmental impacts of this growth, but relatively little attention has been paid to the implications for inequality. In this paper we use household-level microdata from 16 countries to characterize empirically the relationship between climate, income, and residential air conditioning.

Study Results

We show that both current and future air conditioner usage is concentrated among high-income households. Not only do richer countries have much more air conditioning than poorer countries, but within countries adoption is highly concentrated among high-income households. The pattern of adoption is particularly stark in relatively low-income countries such as Pakistan, where we show that the vast majority of adoption between now and 2050 will be concentrated among the upper income tercile. We use our model to forecast future adoption, show how patterns vary across countries and income levels, and discuss what these patterns mean for health, productivity, and educational inequality.

Journal Publication: Davis, Lucas & Gertler, Paul & Jarvis, Stephen & Wolfram, Catherine. (2021). Air conditioning and global inequality. Global Environmental Change. 69. 102299. 10.1016/j.gloenvcha.2021.102299.

Study Overview

We use a multi-country field experiment that combines random variation at the treatment level with exogenous variation in the length of exposure to treatment to test the effect of a slum housing intervention on the evolution of the housing aspirations of untreated co-resident neighbors.

Study Results

Initially after the intervention, we observe a large housing gap in favor of treated units. As a result, non-treated households’ aspirations to upgrade their housing increased sharply relative to the treatment group, echoing an aspiration to “keep up with the treated Joneses”. The aspirational effect is mostly observed among dwellers residing in urban slums, with relatively high levels of income, and located close to treated neighbors. However, after 2 years of treatment exposure, the aspirational effect completely disappears and no effects are found on housing investment. Estimates based on a structural model of aspiration adaptation show that the decay rate is 38% per month, implying that housing aspirations return to baseline levels in just 28 months. Our evidence suggests that simply fostering housing aspirations may be insufficient to encourage housing investment in poor neighborhoods, and thus slum-upgrading policies designed to indirectly stimulate housing expansion may not be as effective as they promise to be.

Journal Publication: Galiani, Sebastian, Paul J. Gertler, Raimundo Undurraga. 2021. "Aspiration adaptation in resource-constrained environments", Journal of Urban Economics, Volume 123, https://doi.org/10.1016/j.jue.2021.103326.

Study Overview

We report the labor market effects of the Jamaica Early Childhood Stimulation intervention at age 31. The study is a small-sample randomized early childhood education stimulation intervention targeting stunted children living in the poor neighborhoods of Kingston, Jamaica. Implemented in 1987-1989, treatment consisted of a two-year home-based intervention designed to improve nutrition and the quality of mother-child interactions to foster cognitive, language and psycho-social skills. The original sample is 127 stunted children between 9 and 24 months old. Our study is able to track and interview 75% of the original sample 30 years after the intervention, both still living in Jamaica and migrated abroad.

Study Results

We find large and statistically significant effects on income and schooling; the treatment group had 43% higher hourly wages and 37% higher earnings than the control group. This is a substantial increase over the treatment effect estimated for age 22 where we observed a 25% increase in earnings. The Jamaican Study is a rare case of a long-term follow up for an early childhood development (ECD) intervention implemented in a less-developed country. Our results confirm large economic returns to an early childhood intervention that targeted disadvantaged families living in poverty in the poor neighborhoods of Jamaica. The Jamaican intervention is being replicated around the world. Our analysis provides justification for expanding ECD interventions targeting disadvantaged children living in poor countries around the world.

Working Paper: Paul J. Gertler & James J. Heckman & Rodrigo Pinto & Susan M. Chang & Sally Grantham-McGregor & Christel Vermeersch & Susan Walker & Amika Wright, 2021. "Effect of the Jamaica Early Childhood Stimulation Intervention on Labor Market Outcomes at Age 31," NBER Working Papers 29292, National Bureau of Economic Research, Inc.

Study Overview

We study an at-scale natural experiment in which debit cards were given to cash transfer recipients who already had a bank account.

Study Results

Using administrative account data and household surveys, we find that beneficiaries accumulated a savings stock equal to 2% of annual income after two years with the card. The increase in formal savings represents an increase in overall savings, financed by a reduction in current consumption. There are two mechanisms. First, debit cards reduce transaction costs of accessing money. Second, they reduce monitoring costs, which led beneficiaries to check their account balances frequently and build trust in the bank.

Intervention: Conditional cash transfer program with debit cards tied to savings accounts

Working Paper: Pierre Bachas & Paul J. Gertler & Sean Higgins & Enrique Seira, 2017. "How Debit Cards Enable the Poor to Save More," NBER Working Papers 23252, National Bureau of Economic Research, Inc.

Journal Publication: Bachas, P., Gertler, P., Higgins, S. and Seira, E. (2021), How Debit Cards Enable the Poor to Save More. The Journal of Finance, 76: 1913-1957. https://doi.org/10.1111/jofi.13021P

Study Overview

We study the medium-term impacts of the Skills for Effective Entrepreneurship Development (SEED) program, an innovative in-residence 3-week mini-MBA program for high school students modeled after western business school curricula and adapted to the Ugandan context. The program featured two separate treatments: the hard-skills MBA features a mix of approximately 75% hard skills and 25% soft skills; the soft skills curriculum has the reverse mix.

Study Results

Using data on 4400 youth from a nationally representative sample in a 3-arm field experiment in Uganda, the 3.5 year follow-up demonstrated that training was effective in improving both hard and soft skills, but only soft skills were directly linked to improvements in self-efficacy, persuasion, and negotiation. The skill upgrade was rewarded in substantially higher earnings; 32.1% and 29.8% increases in earnings for those who attended hard- and soft-training, respectively, most of which, was generated through self-employment. Furthermore, youth in both groups were more likely to start enterprises and more successful in ensuring their businesses’ survival. The program led to significantly larger profits (24.2% and 27.2% for hard- and soft- treatment arms respectively) and larger business capital investments (38.4% and 32.6% for SEED hard and SEED soft, respectively). Both SEED curricula were very cost-effective; two months worth of the extra earnings caused by the training alone would exceed the cost of the program. These benefits abstract from the job- and business-creation benefits of the program, which were substantial: relative to the control group, SEED entrepreneurs created 985 additional jobs and 550 new businesses.

Intervention: Entrepreneurship training

Working Paper: Laura Chioda & David Contreras-Loya & Paul J. Gertler & Dana Carney, 2021. "Making Entrepreneurs: Returns to Training Youth in Hard Versus Soft Business Skills," NBER Working Papers 28845, National Bureau of Economic Research, Inc.

Study Overview

Air conditioning adoption is increasing dramatically worldwide as incomes rise and average temperatures go up. Using daily temperature data from 14,500 weather stations, we rank 219 countries and 1,692 cities based on a widely used measure of cooling demand called total cooling degree day exposure.

Study Results

India, China, Indonesia, Nigeria, Pakistan, Brazil, Bangladesh and the Philippines all have more total cooling degree day exposure than the United States—a country that uses 400 terawatt-hours of electricity annually for air conditioning.

Journal Publication: Biardeau, L.T., Davis, L.W., Gertler, P. et al. Heat exposure and global air conditioning. Nat Sustain 3, 25–28 (2020). https://doi.org/10.1038/s41893-019-0441-9

Study Overview

This paper examines the interaction between vocational and soft skills training on labor market outcomes and expectations of youth in the Dominican Republic. Applicants to a training program were randomly assigned to one of three modalities: a full treatment consisting of vocational and soft skills training plus an internship, a partial treatment consisting of soft skills training plus an internship, or a control group with no training or internship.

Study Results

We find strong and lasting effects of the program on personal skills acquisition and expectations, but results are markedly different for men and women. Shortly after completing the program, all participants reported increased expectations for improved employment and livelihoods. This result is reversed for male participants after three and a half years, potentially explained by the program’s negative short-run labor market effects for that group. On the other hand, female participants experience improved labor market outcomes in the short run and exhibit substantially higher levels of personal skills after three and a half years; the women in the study became more optimistic and reported higher self-esteem. Men experienced no such benefits. Our results suggest that job-training programs of this type can be transformative – for women, life skills mattered and made a difference. But they can also have a downside if, as was the case for men in this study, training creates expectations that are not met. Although, overall, impacts are similar for the full treatment and the partial treatment, the positive impacts on soft skills for women, and the adverse impacts on labor outcomes and expectations for men are stronger for the full treatment.

Journal Publication: Acevedo, Paloma, Guillermo Cruces, Paul J. Gertler, Sebastian Martinez. 2020. "How vocational education made women better off but left men behind", Labour Economics, Volume 65, https://doi.org/10.1016/j.labeco.2020.101824

Study Overview

Parental involvement programs aim to increase school-and-parent communication and support children’s overall learning environment. This paper examines the effects of low-cost, group-based parental involvement interventions in Mexico using data from two randomized controlled trials. The first experiment provided financial resources to parent associations. The second experiment provided information to parents about how to support their children’s learning.

Study Results

Overall, the interventions induced different types of parental engagement in schools. The information intervention changed parenting behavior at home – with large effects among indigenous parents who have historically been discriminated and socially excluded – and improved student behavior in school. The grants did not impact parent or student behaviors. Notably, we do not find impacts of either intervention on educational achievement. To understand these null effects, we explore how social ties between parents and teachers evolved over the course of the two interventions. Parental involvement interventions led to significant changes in perceived trustworthiness between teachers and parents. The results suggest that parental involvement interventions can backfire if institutional rules are unclear about the expectations of parents and teachers

Intervention: Parental empowerment

Working Paper: Barrera-Osorio, Felipe & Paul Gertler & Nozomi Nakajima & Harry Patrinos, 2020. "Promoting Parental Involvement in Schools: Evidence From Two Randomized Experiments," NBER Working Papers 28040, National Bureau of Economic Research, Inc.

Study Overview

A school-based management program was implemented in Mexico in 2001 and continued until 2014. This national program, Programa Escuelas de Calidad, was considered a key intervention to improve learning outcomes. In 2006, the national program was evaluated in the Mexican state of Colima, being the first experimental evaluation of the national program. All schools were invited to participate in the program; a random selection was performed to select the treatment and control groups among all the applicants.

Study Results

An intent-to-treat approach did not detect any impact on learning outcomes; a formal school-based management intervention plus a monetary grant was not enough to improve learning outcomes. First, the schools in the evaluation sample, control, and treatment were schools with high learning outcomes. Second, these schools had experienced some years of regular school-based management practices before the evaluation. A difference-in-difference design is used to identify heterogeneous effects of the program on learning outcomes. The difference-in-difference approach shows that the intensity of treatment increased test scores during the first year of the intervention.

Intervention: School-based management

Journal Publication: Garcia-Moreno, V. A., Gertler, P., & Patrinos, H. A. (2020). School-based management and learning outcomes : Experimental evidence from Colima, Mexico. Community Participation with Schools in Developing Countries: Towards Equitable and Inclusive Basic Education for All.

Study Overview

The adoption of new clinical practice patterns by medical care providers is often challenging, even when they are believed to be both efficacious and profitable. This paper uses a randomized field experiment to examine the effects of temporary financial incentives paid to medical care clinics for the initiation of prenatal care in the first trimester of pregnancy.

Study Results

We show that costs of adjustment as opposed to low perceived value may explain why improved quality care practices diffuse slowly in the medical industry. Using a randomized field experiment conducted in Argentina, we find that temporary financial incentives paid to health clinics for the early initiation of prenatal care motivated providers to test and develop new strategies to locate and encourage pregnant women to seek care in the first trimester of pregnancy. These innovations raised the rate of early initiation of prenatal care by 34 percent while the incentives were being paid in the treatment period. We also find that this increase persisted for at least 24 months after the incentives ended. We show that this is consistent with the presence of up-front costs from adjusting care processes that made it too expensive to develop and implement new strategies to increase early initiation of care in the absence of the incentives. Despite large increases in early initiation of prenatal care, we find no effects on health outcomes.

Intervention: Performance-based financial incentives

Working Paper: Pablo Celhay & Paul J. Gertler & Paula Giovagnoli & Christel Vermeersch, 2015. "Long Run Effects of Temporary Incentives on Medical Care Productivity," NBER Working Papers 21361, National Bureau of Economic Research, Inc.

Journal Publication: Pablo A. Celhay & Paul J. Gertler & Paula Giovagnoli & Christel Vermeersch, 2019. "Long-Run Effects of Temporary Incentives on Medical Care Productivity," American Economic Journal: Applied Economics, vol 11(3), pages 92-127.

Study Overview

Disease management programs aim to reduce cost by improving the quality of care for chronic diseases. Evidence of their effectiveness is mixed. Reducing health care spending sufficiently to cover program costs has proved particularly challenging. This study uses a difference in differences design to examine the impact of a diabetes disease management program for high risk patients on preventive tests, health outcomes, and cost of care.

Study Results

Heterogeneity is examined along the dimensions of severity (measured using the proxy of poor glycemic control) and preventive testing received in the baseline year. Although disease management programs tend to focus on the sickest, the impact of this program concentrates in the group of people who had not received recommended tests in the preintervention period. If confirmed, such findings are practically important to improve cost-effectiveness in disease management programs by targeting relevant subgroups defined both based on severity and on (missing) test information.

Intervention: Disease management program

Journal Publication: Simcoe T, Catillon M, Gertler P. Who benefits most in disease management programs: Improving target efficiency. Health Economics. 2019; 28: 189–203. https://doi.org/10.1002/hec.3836

Study Overview

Debit cards reduce the travel distance to access bank accounts and can increase financial inclusion. We show that in Mexico, cash transfer beneficiaries who already received their transfers in bank accounts and subsequently received debit cards reduce their median distance to access the account from 4.8 to 1.3 kilometers and report being less likely to forgo important activities (childcare, work) to withdraw their transfer. Using account level data, we find a strong negative correlation between the reduction in travel distance and financial activity: beneficiaries facing the largest reductions in distance increase both their number of withdrawals and their savings balances.

Study Results

Debit cards lower transaction costs by reducing the distance to access bank accounts. We find that account holders respond to this reduction in transaction costs by changing the method of transport they use to access their account, with a decrease in transportation by bus and an increase in walking. Furthermore, we find a decrease in the proportion who forgo important activities—such as work or childcare—to withdraw their transfer. The reduction in indirect transaction costs could also improve financial inclusion: we observe that use of the account and savings are correlated with the change in travel distance to access the account.

Intervention: Conditional cash transfer program with debit cards

Journal Publication: Bachas, Pierre, Paul J. Gertler, Sean Higgins, and Enrique Seira. "Digital financial services go a long way: Transaction costs and financial inclusion." In AEA Papers and Proceedings, vol. 108, pp. 444-448. DOI: 10.1257/pandp.20181013

Study Overview

At its September, 2018, meeting in Argentina, the Development Working Group of the G20 launched its Initiative for Early Childhood Development.1 The initiative affirms the importance of early childhood as the foundation for future health and wellbeing, benefiting both individuals and societies. The Working Group expressed concern that, despite evidence of high returns, investment in early childhood development remains insufficient, and the initiative calls for closer examination of national investments in early childhood development, consideration of better assignments, and increases in the resources that benefit families in vulnerable situations. To support this call, we propose setting a minimum investment benchmark using a budget-based approach: a package of services is agreed, with the cost of delivering the package in different contexts expressed as a percentage of gross domestic product (GDP). A given package will comprise a larger share of GDP in lower-income contexts because of the larger proportion of children, increased needs of children, low levels of existing services, and constrained resources to address children’s needs. Furthermore, we propose an aspirational benchmark for investment, set at the same percentage of GDP as the country that currently invests the largest proportion of its GDP in early childhood development. We also propose a minimum expenditure per child to drive equity in services for all children, including a larger minimum for those with disabilities.

Study Results

The cost of a minimum package to enhance human capital has been estimated, which, for early childhood development, includes prenatal health care, immunisations, micronutrients, parental outreach, birth registration, and 1 year of quality preschool (excluding services for children with disabilities). For this minimum package, the required investment (including aid) would be 2.7% Of GDP for low-income countries, 1.2% for lower-middle-income countries, and 0.8% for upper-middle-income countries. This package requires a minimum average annual expenditure per child younger than 6 years of US$71 in low-income countries, $293 in lower-middle-income countries, and $390 in uppermiddle-income countries. Data from the Organisation for Economic Co-operation and Development suggest that Iceland makes the highest investment in early childhood development, investing 1.8% of GDP in formal day care and pre-primary services. To act as an aspirational target, this figure must be raised to include non-centre-based services for the youngest children. With the incomplete data available, a minimum domestic benchmark of 1% of GDP for early childhood development is indicated (with low-income countries requiring additional international assistance). However, this minimum domestic benchmark is likely to increase following a decision on the appropriate package of services needed. The aspirational goal proposed is 2%. Given price differences between countries, the cost per child for agreed services will differ substantially, and estimates need to be made per country income group.

Intervention: Package of services for early childhood development, with cost of delivering based on percentage of country's GDP

Journal Publication: Richter, Linda M., Chris Desmond, Jere Behrman, Pia Britto, Bernadette Daelmans, Amanda E. Devercelli, Paul J. Gertler et al. "G20's initiative for early childhood development." The Lancet 392, no. 10165 (2018): 2695-2696. DOI: 10.1016/S0140-6736(18)33058-7

Study Overview

Replication is essential for building confidence in research studies, yet it is still the exception rather than the rule. That is not necessarily because funding is unavailable — it is because the current system makes original authors and replicators antagonists. Focusing on the fields of economics, political science, sociology and psychology, in which ready access to raw data and software code are crucial to replication efforts, we survey deficiencies in the current system. We propose reforms that can both encourage and reinforce better behaviour — a system in which authors feel that replication of software code is both probable and fair, and in which less time and effort is required for replication.

Study Results

Of 415 articles published in 9 leading economics journals in May 2016, 203 were empirical papers that did not contain proprietary or otherwise restricted data. We checked these to see which sorts of files were downloadable and spent up to four hours per paper trying to execute the code to replicate the results (not including code runtime). We were able to replicate only a small minority of these papers. Overall, of the 203 studies, 76% published at least one of the 4 files required for replication: the raw data used in the study (32%); the final estimation data set produced after data cleaning and variable manipulation (60%); the data-manipulation code used to convert the raw data to the estimation data (42%, but only 16% had both raw data and usable code that ran); and the estimation code used to produce the final tables and figures (72%). Tellingly, the tables and figures could almost always be replicated if the code ran without major modifications. This was a significant hurdle: only 54% and 61% of articles had data-manipulation code or estimation code, respectively, that did not require major modifications.

Journal Publication: Gertler, Paul, Sebastian Galiani, and Mauricio Romero. "How to make replication the norm." Nature 554, no. 7693 (2018): 417-419.

Study Overview

Subjective well-being may not improve in step with increases in material well-being due to hedonic adaptation, a psychological process that attenuates the long-term emotional impact of a favorable or unfavorable change in circumstances. As a result, people’s degree of happiness eventually returns to a stable reference level. We use a multicountry field experiment to examine the impact on subjective measures of well-being of the provision of improved housing to extremely poor populations in order to test whether they exhibit hedonic adaptation when their basic housing needs are met.

Study Results

After 16 months, we find that subjective perceptions of well-being improve substantially for recipients of improved housing but that, after, on average, eight additional months, 60% of that gain has dissipated. Extrapolation achieved through estimation of a structural model of hedonic adaptation suggests that the decay rate of the treatment effect is 20% per month. As a result, after 28 months of treatment exposure, we forecast that the entire treatment effect will have disappeared.

Intervention: Housing upgrade program

Journal Publication: Galiani, Sebastian, Paul J. Gertler, and Raimundo Undurraga. "The half-life of happiness: Hedonic adaptation in the subjective well-being of poor slum dwellers to the satisfaction of basic housing needs." Journal of the European Economic Association 16, no. 4 (2018): 1189-1233. https://doi.org/10.1093/jeea/jvx042

Study Overview

The current evidence on handwashing and sanitation programs suggests limited impacts on health when at-scale interventions have been tested in isolation. However, no published experimental evidence currently exists that tests the interaction effects between sanitation and handwashing. We present the results of two large-scale, government-led handwashing and sanitation promotion campaigns in rural Tanzania, with the objective of tracing the causal chain from hygiene and sanitation promotion to changes in child health outcomes and specifically testing for potential interaction effects of combining handwashing and sanitation interventions.

Study Results

One year after the end of the program, ownership of improved latrines increased from 49.7% to 64.8% (95% CI 57.9%-71.7%) and regular open defecation decreased from 23.1% to 11.1% (95% CI 3.5%-18.7%) in sanitation promotion-only wards. Households in handwashing promotion-only wards showed marginal improvements in handwashing behavior related to food preparation but not at other critical junctures. There were no detectable interaction effects for the combined intervention. The associated cost-per-household gaining access to improved sanitation is estimated to be USD $194. Final effects on child health measured through diarrhea, anemia, stunting and wasting were absent in all treatment groups. Although statistically significant, the changes in intermediate outcomes achieved through each intervention in isolation were not large enough to generate meaningful health impacts.

Intervention: Sanitation and handwashing promotion programs

Journal Publication: Briceño, Bertha, Aidan Coville, Paul J. Gertler, and Sebastian Martinez. "Are there synergies from combining hygiene and sanitation promotion campaigns: evidence from a large-scale cluster-randomized trial in rural Tanzania." PLOS One 12, no. 11 (2017): e0186228.

Study Overview

Information and communication technologies can be used for educational purposes, but these devices may also pose as distractors that may tamper with the learning process. This paper presents results from a randomized controlled trial in which laptops replaced traditional textbook provision in elementary schools in high poverty communities in Honduras. We show that at the end of one school year, we fail to reject that there were no differences between laptop and textbook provision on mathematics and Spanish test scores and in non-academic outcomes related to coding and verbal fluency.

Study Results

We find that at the end of the school year, treatment and control groups achieved similar gains as measured by mathematics and Spanish test scores and in non-academic tests related to coding and verbal fluency. The coding test aimed to measure processing speed and working memory. This implies that the provision of books or laptops did not cause differences in terms of student learning. Our results suggest this is true for third and sixth graders and for academic and non-academic outcomes.

Intervention: Replacing student textbooks with laptops

Journal Publication: Bando, Rosangela, Francisco Gallego, Paul J. Gertler, and Dario Romero Fonseca. "Books or laptops? The effect of shifting from printed to digital delivery of educational content on learning." Economics of Education Review 61 (2017): 162-173. https://doi.org/10.1016/j.econedurev.2017.07.005

Study Overview

This paper provides empirical evidence regarding the causal effects that upgrading slum dwellings has on the living conditions of the extremely poor. In particular, we study the impact of providing better houses in situ to slum dwellers in El Salvador, Mexico and Uruguay. We experimentally evaluate the impact of a housing project run by the NGO TECHO (“roof”), which provides basic pre-fabricated houses to members of extremely poor population groups in Latin America. The main objective of the program is to improve household well-being.

Study Results

Our findings show that better houses have a positive effect on overall housing conditions and general well-being: the members of treated households are happier with their quality of life. In two countries, we also document improvements in children’s health; in El Salvador, slum dwellers who have received the TECHO houses also feel that they are safer. We do not find this result, however, in the other two experimental samples. There are no other noticeable robust effects in relation to the possession of durable goods or labor outcomes. Our results are robust in terms of both their internal and external validity because they are derived from similar experiments in three different Latin American countries.

Intervention: Housing upgrade program

Journal Publication: Galiani, Sebastian, Paul J. Gertler, Raimundo Undurraga, Ryan Cooper, Sebastián Martínez, and Adam Ross. "Shelter from the storm: Upgrading housing infrastructure in Latin American slums." Journal of Urban Economics 98 (2017): 187-213. https://doi.org/10.1016/j.jue.2016.11.001

Study Overview

The second edition of the Impact Evaluation in Practice handbook is a comprehensive and accessible introduction to impact evaluation for policy makers and development practitioners. First published in 2011, it has been used widely across the development and academic communities. The book incorporates real-world examples to present practical guidelines for designing and implementing impact evaluations. Readers will gain an understanding of impact evaluations and the best ways to use them to design evidence-based policies and programs. The updated version covers the newest techniques for evaluating programs and includes state-of-the-art implementation advice, as well as an expanded set of examples and case studies that draw on recent development challenges. It also includes new material on research ethics and partnerships to conduct impact evaluation.

Study Results

The handbook is divided into four sections: Part One discusses what to evaluate and why; Part Two presents the main impact evaluation methods; Part Three addresses how to manage impact evaluations; Part Four reviews impact evaluation sampling and data collection. Case studies illustrate different applications of impact evaluations. The book links to complementary instructional material available online, including an applied case as well as questions and answers. The updated second edition will be a valuable resource for the international development community, universities, and policy makers looking to build better evidence around what works in development.

Research Partner: The Strategic Impact Evaluation Fund (SIEF)

Journal Publication: Gertler, Paul J.; Martinez, Sebastian; Premand, Patrick; Rawlings, Laura B.; Vermeersch, Christel M. J.. 2016. Impact Evaluation in Practice, Second Edition. © World Bank. http://hdl.handle.net/10986/25030 License: CC BY 3.0 IGO.

Study Overview

Building on long-term benefits of early intervention (Paper 2 of this Series) and increasing commitment to early childhood development (Paper 1 of this Series), scaled up support for the youngest children is essential to improving health, human capital, and wellbeing across the life course. In this third paper, new analyses show that the burden of poor development is higher than estimated, taking into account additional risk factors. National programmes are needed. Greater political prioritisation is core to scale-up, as are policies that afford families time and financial resources to provide nurturing care for young children. Effective and feasible programmes to support early child development are now available. In this paper, we highlight the role of the health and nutrition sector as an entry point to scaling up of programmes for early childhood development.

Study Results

Strong biological, psychosocial, and economic arguments exist for intervening as early as possible to promote, protect, and support children’s development, specifically during pregnancy and the first 2–3 years. An emphasis on the first years of life is articulated within a life course perspective that also requires quality provisions at older ages, especially during child day care and preschool, following on through schooling and into adolescence so as to capitalise on dynamic complementarities between investments made during successive lifecycle stages.

Intervention: Integrating and promoting child development

Journal Publication: Richter, Linda M., Bernadette Daelmans, Joan Lombardi, Jody Heymann, Florencia Lopez Boo, Jere R. Behrman, Chunling Lu et al. "Investing in the foundation of sustainable development: pathways to scale up for early childhood development." The Lancet 389, no. 10064 (2017): 103-118. DOI: 10.1016/S0140-6736(16)31698-1

Study Overview

The creation of non-contributory pension schemes is becoming increasingly common as countries struggle to reduce poverty. Drawing on data from Mexico’s Adultos Mayores Program (Older Adults Program) – a cash transfer scheme aimed at rural adults over 70 years of age – we evaluate the effects of this program on the well-being of the beneficiary population.

Study Results

Exploiting a quasi-experimental design whereby the program relies on exogenous geographical and age cutoffs to identify its target group, we find that the mental health of elderly adults in the program is significantly improved, as their score on the Geriatric Depression Scale decreases by 12%. We also find that the proportion of treated individuals doing paid work is reduced by 20%, with most of these people switching from their former activities to work in family businesses; treated households show higher levels of consumption expenditures (on average, an increase of 23%). Very importantly, we also rule out significant anticipation effects that might have been associated with the program transfers. Thus, overall, we find that non-contributory pension schemes targeting the poor in developing countries can improve the well-being of poor older adults without having any indirect impact (through potential anticipation effects) on the earnings or savings of future program participants.

Intervention: Non-contributory pension program

Journal Publication: Galiani, Sebastian, Paul J. Gertler, and Rosangela Bando. "Non-contributory pensions." Labour Economics 38 (2016): 47-58. https://doi.org/10.1016/j.labeco.2015.11.003

Study Overview

When physicians own complementary medical service facilities such as laboratories and imaging centers, they gain financially by referring patients to these entities. This creates an incentive for the physician to exploit patients’ trust by recommending more services than necessary. In this paper, we examine the effect of a “Stark-Law” like policy introduced in Taiwan on moral hazard and vertical integration. The “separating” policy prohibited physicians from owning pharmacies and dispensing drugs, but included a safe harbor exemption for physician groups that have an onsite pharmacy with a licensed pharmacist integrated into their practice.

Study Results

We estimate that where the policy was binding, eliminating this incentive caused physicians to prescribe 7.1% less in drugs. Taking into account increases in complementary diagnostic services and that drugs are only a part of overall primary care spending, the policy reduced total expenditures by 1.8%. However, a large number of clinics exploited a loophole in the law and either had at baseline or integrated pharmacies into their practices post-policy making them exempt from the policy. As a result, the policy only reduced total drug expenditures by 2.1% and total primary care cost by 0.5%.

Intervention: Separating policy restricting physician ownership of pharmacies

Journal Publication: Chen, Brian K., Paul J. Gertler, and Chun-Yuh Yang. "Physician ownership of complementary medical services." Journal of Public Economics 144 (2016): 27-39. https://doi.org/10.1016/j.jpubeco.2016.09.005

Study Overview

This paper analyzes a randomized experiment that uses novel strategies to promote handwashing with soap at critical points in time in Peru. It evaluates a large-scale comprehensive initiative that involved both community and school activities in addition to communication campaigns. The analysis indicates that the initiative was successful in reaching the target audience and in increasing the treated population’s knowledge about appropriate handwashing behavior. These improvements translated into higher self-reported and observed handwashing with soap at critical junctures. However, no significant improvements in the health of children under the age of 5 years were observed.

Study Results

The community intervention that has been studied here, which combined a mass media campaign with more intensive training and promotional activities at the district level, proved to be effective in reaching the targeted audience with its handwashing promotion message, and it significantly increased the proportion of mothers and caregivers who reported receiving it. The treated community group reported receiving the message through at least one communication channel more than 15 percent more often than the control group did. This more comprehensive treatment seems to have successfully transmitted the key messages related to handwashing with soap. Increased exposure to the campaign and educational sessions translated into observable learning about best handwashing practices.

Intervention: Handwashing promotion program

Journal Publication: Galiani, Sebastian, Paul J. Gertler, Nicolas Ajzenman, and Alexandra Orsola‐Vidal. "Promoting handwashing behavior: The effects of large‐scale community and school‐level interventions." Health Economics 25, no. 12 (2016): 1545-1559. https://doi.org/10.1002/hec.3273

Study Overview

We study household decisions to acquire energy-using assets in the presence of rising incomes. We develop a theoretical framework to characterize the effect of income growth on asset purchases when consumers face credit constraints. We use large and plausibly exogenous shocks to household income generated by the conditional-cash-transfer program in Mexico, Oportunidades, to show that asset acquisition is nonlinear, depends, as predicted in the presence of credit constraints, on the pace of income growth, and both effects are economically large among beneficiaries. Our results may help explain important worldwide trends in the relationship between energy use and income growth.

Study Results

Our results suggest that credit-constrained households in the developing world are likely to acquire energy-using assets such as refrigerators at rapid rates as their incomes rise above a certain threshold. While these assets help improve health and human development, the energy they use can be significant. Energy forecasters concur that the bulk of the growth in energy demand and associated greenhouse gas emissions is likely to come from the developing world (EIA, 2011a; IEA, 2012). Their analyses suggest growth of over 90 percent through 2035 in the developing world while only about 15 percent in the developed countries. Several pieces of evidence suggest, however, that existing forecasts have not allowed for the possible nonlinear relationship between income growth, especially pro-poor growth, and energy demand suggested by our model.

Journal Publication: Gertler, Paul J., Orie Shelef, Catherine D. Wolfram, and Alan Fuchs. "The demand for energy-using assets among the world's rising middle classes." American Economic Review 106, no. 6 (2016): 1366-1401. DOI: 10.1257/aer.20131455

Study Overview

As household incomes rise around the world and global temperatures go up, the use of air conditioning is poised to increase dramatically. Air conditioning growth is expected to be particularly strong in middle-income countries, but direct empirical evidence is scarce. In this paper we use high-quality microdata from Mexico to describe the relationship between temperature, income, and air conditioning. We describe both how electricity consumption increases with temperature given current levels of air conditioning, and how climate and income drive air conditioning adoption decisions. We then combine these estimates with predicted end-of-century temperature changes to forecast future energy consumption.

Study Results

Under conservative assumptions about household income, our model predicts near-universal saturation of air conditioning in all warm areas within just a few decades. Temperature increases contribute to this surge in adoption, but income growth by itself explains most of the increase. What this will mean for electricity consumption and carbon dioxide emissions depends on the pace of technological change. Continued advances in energy efficiency or the development of new cooling technologies could reduce the energy consumption impacts. Similarly, growth in low-carbon electricity generation could mitigate the increases in carbon dioxide emissions. However, the paper illustrates the enormous potential impacts in this sector, highlighting the importance of future research on adaptation and underscoring the urgent need for global action on climate change.

Journal Publication: Davis, Lucas W., and Paul J. Gertler. "Contribution of air conditioning adoption to future energy use under global warming." Proceedings of the National Academy of Sciences 112, no. 19 (2015): 5962-5967. https://doi.org/10.1073/pnas.1423558112

Study Overview

Paying for performance provides financial rewards to medical care providers for improvements in performance measured by utilization and quality of care indicators. In 2006, Rwanda began a pay for performance scheme to improve health services delivery, including HIV/AIDS services. Using a prospective quasi-experimental design, this study examines the scheme’s impact on individual and couples HIV testing.

Study Results

We find a positive impact of pay for performance on HIV testing among married individuals (10.2 percentage points increase). Paying for performance also increased testing by both partners by 14.7 percentage point among discordant couples in which only one of the partners is an AIDS patient.

Intervention: Pay-for-performance financial incentives

Journal Publication: de Walque, Damien, Paul J. Gertler, Sergio Bautista-Arredondo, Ada Kwan, Christel Vermeersch, Jean de Dieu Bizimana, Agnès Binagwaho, and Jeanine Condo. "Using provider performance incentives to increase HIV testing and counseling services in Rwanda." Journal of Health Economics 40 (2015): 1-9. https://doi.org/10.1016/j.jhealeco.2014.12.001

Study Overview

Recent studies have linked transfers from Mexican conditional cash transfer programme Oportunidades (formerly PROGRESA) to improvements in child development (Fernald et al., 2008, 2009), but this work has been criticized as failing to account for endogeneity of the transfers. We create an exogenous instrument for the amount of transfers and use it to test programme and transfer effects. Applying the new instrument confirms that improvements in child development are more linked to the transfers themselves than to other portions of the programme, which involve medical check-ups as well as educational sessions for mothers.

Study Results

The effects of transfer amounts are stronger than the effects of 18 additional months on the program for all outcomes but the Strengths and Difficulties Questionnaire, for which only program duration is significant. Higher transfer amounts are associated with both physical and cognitive development, being linked to improvements in height for age and on the verbal WASI scores. Effects are not statistically significant but point estimates are positive for the effects of additional transfers on BMI for age and for the cognitive performance WASI scale. We conclude that income, not information, is the key to achieving improvements in child development outcomes.

Intervention: Conditional cash transfer program

Journal Publication: Manley, James, Lia Fernald, and Paul J. Gertler. "Wealthy, healthy and wise: does money compensate for being born into difficult conditions?." Applied Economics Letters 22, no. 2 (2015): 121-126. https://doi.org/10.1080/13504851.2014.929618

Study Overview

This paper evaluates a large-scale appliance replacement program in Mexico that from 2009 to 2012 helped 1.9 million households replace their old refrigerators and air conditioners with energyefficient models.

Study Results

Using household-level billing records from the universe of Mexican residential customers, we find that refrigerator replacement reduces electricity consumption by 8 percent, about one-quarter of what was predicted by ex ante analyses. Moreover, we find that air conditioning replacement actually increases electricity consumption. Overall, we find that the program is an expensive way to reduce externalities from energy use, reducing carbon dioxide emissions at a program cost of over $500 per ton.

Intervention: Appliance replacement program (C4C)

Journal Publication: Davis, Lucas W., Alan Fuchs, and Paul J. Gertler. "Cash for coolers: evaluating a large-scale appliance replacement program in Mexico." American Economic Journal: Economic Policy 6, no. 4 (2014): 207-238. DOI: 10.1257/pol.6.4.207

Study Overview

A substantial literature shows that U.S. early childhood interventions have important long-term economic benefits. However, there is little evidence on this question for developing countries. We report substantial effects on the earnings of participants in a randomized intervention conducted in 1986–1987 that gave psychosocial stimulation to growth-stunted Jamaican toddlers. The intervention consisted of weekly visits from community health workers over a 2-year period that taught parenting skills and encouraged mothers and children to interact in ways that develop cognitive and socioemotional skills. The authors reinterviewed 105 out of 129 study participants 20 years later and found that the intervention increased earnings by 25%, enough for them to catch up to the earnings of a nonstunted comparison group identified at baseline (65 out of 84 participants).

Study Results

Twenty years after the intervention was conducted, we find that the earnings of the stimulation group are 25% higher than those of the control group and caught up to the earnings of a non-stunted comparison group. These findings show that a simple psychosocial stimulation intervention in early childhood for disadvantaged children can have a substantial effect on labor market outcomes and can compensate for developmental delays. The estimated impacts are substantially larger than the impacts reported for the US–based interventions, suggesting that ECD interventions may be an especially effective strategy for improving long-term outcomes of disadvantaged children in developing countries.

Intervention: Psychosocial stimulation for growth-stunted toddlers

Journal Publication: Gertler, Paul, James Heckman, Rodrigo Pinto, Arianna Zanolini, Christel Vermeersch, Susan Walker, Susan M. Chang, and Sally Grantham-McGregor. "Labor market returns to an early childhood stimulation intervention in Jamaica." Science 344, no. 6187 (2014): 998-1001. DOI: 10.1126/science.1251178

Study Overview

Poor sanitation is thought to be a major cause of enteric infections among young children. However, there are no previously published randomized trials to measure the health impacts of large-scale sanitation programs. India’s Total Sanitation Campaign (TSC) is one such program that seeks to end the practice of open defecation by changing social norms and behaviors, and providing technical support and financial subsidies. The objective of this study was to measure the effect of the TSC implemented with capacity building support from the World Bank’s Water and Sanitation Program in Madhya Pradesh on availability of individual household latrines (IHLs), defecation behaviors, and child health (diarrhea, highly credible gastrointestinal illness [HCGI], parasitic infections, anemia, growth).

Study Results

The intervention increased percentage of households in a village with improved sanitation facilities as defined by the WHO/UNICEF Joint Monitoring Programme by an average of 19% (95% CI for difference: 12%–26%; group means: 22% control versus 41% intervention), decreased open defecation among adults by an average of 10% (95% CI for difference: 4%–15%; group means: 73% intervention versus 84% control). However, the intervention did not improve child health measured in terms of multiple health outcomes (diarrhea, HCGI, helminth infections, anemia, growth). The results underscore the difficulty of achieving adequately large improvements in sanitation levels to deliver expected health benefits within large-scale rural sanitation programs.

Intervention: Total Sanitation Campaign (TSC) program

Journal Publication: Patil, Sumeet R., Benjamin F. Arnold, Alicia L. Salvatore, Bertha Briceno, Sandipan Ganguly, John M. Colford Jr, and Paul J. Gertler. "The effect of India's total sanitation campaign on defecation behaviors and child health in rural Madhya Pradesh: a cluster randomized controlled trial." PLOS medicine 11, no. 8 (2014): e1001709. https://doi.org/10.1371/journal.pmed.1001709

Study Overview

There is a growing concern that food or cash transfer programs may contribute to overweight and obesity in adults. We studied the impact of Mexico’s Programa de Apoyo Alimentario (PAL), which provided very poor rural households with cash or in-kind transfers, on women’s body weight. A random sample of 208 rural communities in southern Mexico was randomly assigned to 1 of 4 groups: food basket with or without health and nutrition education, cash with education, or control. The impact on women’s weight was estimated in a cohort of 3010 women using a difference-in-difference model. We compared the impact between the food basket and cash groups and evaluated whether the impact was modified by women’s BMI status at baseline.

Study Results

With respect to the control group, the program increased women’s weight in the food basket (550 ± 210 g; P = 0.004) and the cash group (420 ± 230 g; P = 0.032); this was equivalent to 70 and 53% increases in weight gain, respectively, over that observed in the control group in a 23-mo time period. The greatest impact was found in already obese women: 980 ± 290 g in the food basket group (P = 0.001) and 670 ± 320 g in the cash group (P = 0.019). Impact was marginally significant in women with a preprogram BMI between 25 and 30 kg/m2: 490 ± 310 g (P = 0.055) and 540 ± 360 g (P = 0.067), respectively. No program impact was found in women with a BMI <25 kg/m2. Providing households with a considerable amount of unrestricted resources led to excess weight gain in an already overweight population. Research is needed to develop cost-effective behavior change communication strategies to complement cash and in-kind transfer programs such as PAL and to help beneficiaries choose healthy diets that improve the nutritional status of all family members.

Intervention: Food basket, cash transfer

Journal Publication: Leroy, Jef L., Paola Gadsden, Teresa González de Cossío, and Paul J. Gertler. "Cash and in-kind transfers lead to excess weight gain in a population of women with a high prevalence of overweight in rural Mexico." The Journal of Nutrition 143, no. 3 (2013): 378-383. https://doi.org/10.3945/jn.112.167627

Study Overview

We examine how the productivity of different industries changes over the course of a financial crisis by exploiting cross-firm, within-industry differences in productivity resulting from the Asian financial crisis of 1997. We show that the crisis coincided with dramatic changes in productivity and that many of these changes were sustained in the long run.

Study Results

In particular, an increasing number of industries experienced decreases in average firm productivity during the crisis and did not recover. Further, we find that changes in industrial productivity in the recovery period are driven not by increases in the productivity of existing firms, but rather by the entry of new firms and changes to the reallocation of market share. Finally, we find that foreign exporters’ productivity was the least impacted by the crisis, suggesting that only access to alternate forms of both capital and international markets can help to smooth investment and maintain productivity over a financial crisis.

Journal Publication: Poczter, Sharon, Paul J. Gertler, and Alexander D. Rothenberg. "Financial crisis and productivity evolution: Evidence from Indonesia." The World Economy 37, no. 5 (2014): 705-731. https://doi.org/10.1111/twec.12086

Study Overview

Many community-based studies of acute child illness rely on cases reported by caregivers. In prior investigations, researchers noted a reporting bias when longer illness recall periods were used. The use of recall periods longer than 2–3 days has been discouraged to minimize this reporting bias. In the present study, we sought to determine the optimal recall period for illness measurement when accounting for both bias and variance. Using data from 12,191 children less than 24 months of age collected in 2008–2009 from Himachal Pradesh in India, Madhya Pradesh in India, Indonesia, Peru, and Senegal, we calculated bias, variance, and mean squared error for estimates of the prevalence ratio between groups defined by anemia, stunting, and underweight status to identify optimal recall periods for caregiver-reported diarrhea, cough, and fever.

Study Results

There was little bias in the prevalence ratio when a 7-day recall period was used (<10% in 35 of 45 scenarios), and the mean squared error was usually minimized with recall periods of 6 or more days. Shortening the recall period from 7 days to 2 days required sample-size increases of 52%–92% for diarrhea, 47%–61% for cough, and 102%–206% for fever. In contrast to the current practice of using 2-day recall periods, this work suggests that studies should measure caregiver-reported illness with a 7-day recall period.

Journal Publication: Arnold, Benjamin F., Sebastian Galiani, Pavani K. Ram, Alan E. Hubbard, Bertha Briceño, Paul J. Gertler, and John M. Colford Jr. "Optimal recall period for caregiver-reported illness in risk factor and intervention studies: a multicountry study." American Journal of Epidemiology 177, no. 4 (2013): 361-370. https://doi.org/10.1093/aje/kws281

Study Overview

The objective of this study was to measure willingness-to-accept (WTA) reductions in risks for HIV and other sexually transmitted infections (STI) using conditional economic incentives (CEI) among men who have sex with men (MSM), including male sex workers (MSW) in Mexico City. A survey experiment was conducted with 1,745 MSM and MSW (18-25 years of age) who received incentive offers to decide first whether to accept monthly prevention talks and STI testing; and then a second set of offers to accept to stay free of STIs (verified by quarterly biological testing). The survey used random-starting-point and iterative offers. WTA was estimated with a maximum likelihood double-bounded dichotomous choice model.

Study Results

For a combination program with monthly prevention talks, and staying free of curable STI, the implied WTA was USD$ 288 per person per year, but it was lower for MSW: USD$ 156 per person per year. Thus, some of the populations at highest risk of HIV infection (MSM and MSW) seem well disposed to participate in a CEI program for HIV and STI prevention in Mexico. The average WTA estimate is within the range of feasible allocations for prevention in the local context. Given the potential impact, Mexico, a leader in conditional cash transfers for human development and poverty reduction, could extend that successful model to targeted HIV/STI prevention.

Intervention: Conditional cash transfer program, economic incentives

Journal Publication: Galárraga, Omar, Sandra G. Sosa-Rubí, César Infante, Paul J. Gertler, and Stefano M. Bertozzi. "Willingness-to-accept reductions in HIV risks: conditional economic incentives in Mexico." The European Journal of Health Economics 15 (2014): 41-55. PMCID: PMC4084857, PMID: 23377757

Study Overview

We examine a very inexpensive program in Mexico that involves parents directly in the management of schools located in disadvantaged rural communities. The program, known as AGE, finances parent associations and motivates parental participation by involving them in the management of primary school grants.

Study Results

We find that AGE reduced grade failure by 7.4% and grade repetition by 5.5% in grades 1 through 3. However, while AGE was effective in poor communities, it had no effect in extremely poor communities.

Journal Publication: Gertler, Paul J., Harry Anthony Patrinos, and Marta Rubio-Codina. "Empowering parents to improve education: Evidence from rural Mexico." Journal of Development Economics 99, no. 1 (2012): 68-79. https://doi.org/10.1016/j.jdeveco.2011.09.004

Study Overview

Over the next 25 to 30 years, nearly all of the growth in energy demand, fossil fuel use, associated local pollution, and greenhouse gas emissions is forecast to come from the developing world. This paper argues that the world’s poor and near-poor will play a major role in driving medium-run growth in energy consumption. As the world economy expands and poor households’ incomes rise, they are likely to get connected to the electricity grid, gain access to good roads, and purchase energy-using assets like appliances and vehicles for the first time. We argue that the current forecasts for energy demand in the developing world may be understated because they do not accurately capture growth in demand along the extensive margin, as low-income households buy their first durable appliances and vehicles.

Study Results

Within a country, the adoption of energy-using assets typically follows an S-shaped pattern: among the very poor, we see little increase in the number of households owning refrigerators, vehicles, air conditioners, and other assets as incomes go up; above a first threshold income level, we see rapid increases of ownership with income; and above a second threshold, increases in ownership level off. A large share of the world’s population has yet to go through the first transition, suggesting there is likely to be a large increase in the demand for energy in the coming years.

Journal Publication: Wolfram, Catherine, Orie Shelef, and Paul J. Gertler. "How will energy demand develop in the developing world?." Journal of Economic Perspectives 26, no. 1 (2012): 119-138. DOI: 10.1257/jep.26.1.119

Study Overview

Gradients across socio-economic position exist for many measures of children’s health and development in higher-income countries. These associations may not be consistent, however, among the millions of children living in lower- and middle-income countries. Our objective was to examine child development and growth in young children across socio-economic position in four developing countries. We used cross-sectional surveys, child development assessments, measures of length (LAZ), and home stimulation (Family Care Index) of children in India, Indonesia, Peru, and Senegal. The Extended Ages and Stages Questionnaire (EASQ) was administered to parents of all children ages 3–23 mo in the household (n =8,727), and length measurements were taken for all children 0–23 mo (n = 11,102).

Study Results

Household wealth and maternal education contributed significantly and independently to the variance in EASQ and LAZ scores in all countries, while controlling for child’s age and sex, mother’s age and marital status, and household size. Being in the fifth wealth quintile in comparison with the first quintile was associated with significantly higher EASQ scores (0.27 to 0.48 of a standardized score) and higher LAZ scores (0.37 to 0.65 of a standardized score) in each country, while controlling for maternal education and covariates. Wealth and education gradients increased over the first two years in most countries for both EASQ and LAZ scores, with larger gradients seen in 16–23-mo-olds than in 0–7mo-olds. Mediation analyses revealed that parental home stimulation activities and LAZ were significant mediating variables and explained up to 50% of the wealth effects on the EASQ.

Journal Publication: Fernald, Lia CH, Patricia Kariger, Melissa Hidrobo, and Paul J. Gertler. "Socioeconomic gradients in child development in very young children: Evidence from India, Indonesia, Peru, and Senegal." Proceedings of the National Academy of Sciences 109, supplement 2 (2012): 17273-17280. https://doi.org/10.1073/pnas.1121241109

Study Overview

Using data from a randomized experiment, we find that poor rural Mexican households invested part of their cash transfers from the Oportunidades program in productive assets, increasing agricultural income by almost 10 percent after 18 months of benefits. We estimate that for each peso transferred, households consume 74 cents and invest the rest, permanently increasing long-term consumption by about 1.6 cents. Results suggest that cash transfers can achieve long-term increases in consumption through investment in productive activities, thereby permitting beneficiary households to attain higher living standards that are sustained even after transitioning off the program.

Study Results

The analysis conducted in this study provides evidence that cash transfer payments from the Oportunidades program increase consumption not only through direct expenditures out of current transfers, but also through the income generated from investing part of the transfers in farms and micro-enterprises. Beneficiary households experience large increases in participation in microenterprise activities and increased investments in farm assets and agricultural activities. Furthermore, households that receive the largest transfers are most likely to invest.

Journal Publication: Gertler, Paul J., Sebastian W. Martinez, and Marta Rubio-Codina. "Investing cash transfers to raise long-term living standards." American Economic Journal: Applied Economics 4, no. 1 (2012): 164-192. DOI: 10.1257/app.4.1.164

Study Overview

Evidence about the best methods with which to accelerate progress towards achieving the Millennium Development Goals is urgently needed. We assessed the effect of performance-based payment of health-care providers (payment for performance; P4P) on use and quality of child and maternal care services in health-care facilities in Rwanda.

Study Results

Our model estimated that facilities in the intervention group had a 23% increase in the number of institutional deliveries and increases in the number of preventive care visits by children aged 23 months or younger (56%) and aged between 24 months and 59 months (132%). No improvements were seen in the number of women completing four prenatal care visits or of children receiving full immunisation schedules. We also estimate an increase of 0.157 standard deviations (95% CI 0.026–0.289) in prenatal quality as measured by compliance with Rwandan prenatal care clinical practice guidelines. The P4P scheme in Rwanda had the greatest effect on those services that had the highest payment rates and needed the least effort from the service provider.

Intervention: Pay-for-performance financial incentives

Journal Publication: Basinga, Paulin, Paul J. Gertler, Agnes Binagwaho, Agnes LB Soucat, Jennifer Sturdy, and Christel MJ Vermeersch. "Effect on maternal and child health services in Rwanda of payment to primary health-care providers for performance: an impact evaluation." The Lancet 377, no. 9775 (2011): 1421-1428. DOI: 10.1016/S0140-6736(11)60177-3

Study Overview

Impact Evaluation in Practice presents a comprehensive, easy-to-understand introduction to impact evaluation. With many real-life and hypothetical examples, it gives an overview of how to design and use impact evaluation to build more effective programs to alleviate poverty and improve people’s lives. The goal is to further the ability of policymakers and practitioners to use impact evaluations to help make policy decisions based on evidence of what works the most effectively.

Study Results

Readers will gain an understanding of the uses of impact evaluation and the best ways to use evaluations to design policies and programs that are based on evidence of what works most effectively. The handbook is divided into three sections: Part One discusses what to evaluate and why; Part Two outlines the theoretical underpinnings of impact evaluation; and Part Three examines how to implement an evaluation. Case studies illustrate different methods for carrying out impact evaluations.

Research Partner: The Strategic Impact Evaluation Fund (SIEF)

Journal Publication: Gertler, Paul J.; Martinez, Sebastian; Premand, Patrick; Rawlings, Laura B.; Vermeersch, Christel M. J.. 2011. Impact Evaluation in Practice, First Edition. © World Bank. http://hdl.handle.net/10986/2550 License: CC BY 3.0 IGO.

Study Overview

A number of countries are pursuing the regulation of sex work to decrease the spread of sexually transmitted infections (STIs) and to reduce the probability of a generalized human immunodeficiency virus/acquired immunodeficiency syndrome epidemic. We study the effects of enforcing licensing regulation laws on sex worker STI rates, using nationally representative sex worker data from Ecuador.

Study Results

We find that increasing enforcement in the street sector significantly decreases STIs. However, increasing enforcement in the brothel sector increases the probability of a sex worker ever being infected with any STI. Increasing enforcement in the street shifts some sex workers from the more risky street into the less risky brothels and increases street prices, reducing the overall number of street clients. As a result, overall infection rates decrease. In contrast, increasing enforcement in the brothel sector can exacerbate public health problems by inducing some unlicensed brothel sex workers into the riskier street sector.

Journal Publication: Gertler, Paul J., and Manisha Shah. "Sex work and infection: what’s law enforcement got to do with it?." The Journal of Law and Economics 54, no. 4 (2011): 811-840. https://doi.org/10.1086/661634

Study Overview

Data from a controlled randomised trial are used to estimate the effect of Mexico’s conditional cash transfer programme, Oportunidades, on birth outcomes, and to examine the pathways by which it works. Birth weights average 127.3 grams higher, and low birth weight incidence is 44.5 per cent lower among beneficiary mothers. Better birth outcomes are explained entirely by better quality prenatal care. Oportunidades affected quality through empowering women with information about adequate healthcare content to expect better care, and with skills and social support to negotiate better care. Efforts to empower the less well-off are necessary for public services to fully benefit the poor.

Study Results

This study demonstrates that Oportunidades resulted in improved birth outcomes. Specifically, using the randomized design, we find that beneficiary births were 127.3- gram higher and 44.5 percent less likely to be low birth weight than non-beneficiary births. In examining the pathways for this result, we conclude that these improvements in birth weight were primarily attributable to improvements in the quality of prenatal care, that the improved quality is a manifestation of the programís empowering women to demand their right to quality care. The program empowered women by informing women about the importance of prenatal care, the content of prenatal, their rights to this content, providing social support, and encouraging them to be informed and active health consumers.

Intervention: Conditional cash transfer program

Journal Publication: Barber, Sarah L., and Paul J. Gertler. "Empowering women: how Mexico's conditional cash transfer programme raised prenatal care quality and birth weight." Journal of Development Effectiveness 2, no. 1 (2010): 51-73. https://doi.org/10.1080/19439341003592630

Study Overview

Mexico’s conditional cash transfer programme, Oportunidades, was started to improve the lives of poor families through interventions in health, nutrition, and education. We investigated the effect of Oportunidades on children almost 10 years after the programme began.

Study Results

Early enrolment reduced behavioural problems for all children in the early versus late treatment group, but we identified no difference between groups for mean height-for-age Z scores, BMI-for-age Z scores, or assessment scores for language or cognition. An additional 18 months of the programme before age 3 years for children aged 8–10 years whose mothers had no education resulted in improved child growth of about 1.5 cm assessed as height-for-age Z score, independently of cash received. An additional 18 months in the Oportunidades programme has independent beneficial effects other than money, especially for women with no formal education. The money itself also has significant effects on most outcomes, adding to existing evidence for interventions in early childhood.

Intervention: Conditional cash transfer program

Journal Publication: Fernald, Lia CH, Paul J. Gertler, and Lynnette M. Neufeld. "10-year effect of Oportunidades, Mexico's conditional cash transfer programme, on child growth, cognition, language, and behaviour: a longitudinal follow-up study." The Lancet 374, no. 9706 (2009): 1997-2005. DOI: 10.1016/S0140-6736(09)61676-7

Study Overview

Families in developing countries face enormous financial risks from major illness both in terms of the cost of medical care and the loss in income associated with reduced labor supply and productivity. We test whether access to microfinancial savings and lending institutions helps Indonesian families smooth consumption after declines in adult health. In general, results support the importance of these institutions in helping families to self-insure consumption against health shocks.

Study Results

In this study, families that live far from a financial institution will suffer greater losses in consumption than will families living nearer the institutions. Importantly, this result does not appear to be due to financial institutions locating themselves near the advantaged, as the microfinance provider BRI does not follow that pattern. Several tests indicate that these correlations are probably not due to state-dependent preferences where people who become disabled prefer to consume less. In contrast, we find effects for both those engaged in work with and without physical labor before the health shock. Moreover, we see no effects of health on consumption for those with high initial assets and those living near a financial institutions.

Journal Publication: Gertler, Paul, David I. Levine, and Enrico Moretti. "Do microfinance programs help families insure consumption against illness?." Health Economics 18, no. 3 (2009): 257-273. https://doi.org/10.1002/hec.1372

Study Overview

The hospital industry is one of this country’s largest mixed industries, with for‐profit, nonprofit, and government hospitals operating in the same local markets. But how do ownership types differ? Previous studies have compared costs among different hospitals. However, these studies have not been entirely successful because costs cannot be meaningfully compared without controlling for hard‐to‐measure quality of service. In this study, we look to the market for corporate control—or takeovers—for evidence of ownership‐related differences.

Study Results

We find that nonprofit and for‐profit firms pay different prices and that these differences relate to the nonprofit’s mission. Specifically, nonprofits and for‐profits pay the same price when buying for‐profits, but nonprofits pay less when buying a “like‐minded” nonprofit (so religious nonprofits pay less for other religious nonprofits, for example). The resulting dual‐price equilibrium suggests that nonprofits have a different objective than do for‐profits but also that nonprofits behave competitively and efficiently when interacting with for‐profits.

Journal Publication: Gertler, Paul, and Jennifer Kuan. "Does it matter who your buyer is? The role of nonprofit mission in the market for corporate control of hospitals." The Journal of Law and Economics 52, no. 2 (2009): 295-306. https://doi.org/10.1086/596037

Study Overview

Governments are increasingly using conditional cash transfer programs to reduce the negative effects of poverty on children’s development. These programs have demonstrated benefits for children’s nutrition and physical development, but the effect of conditional cash transfers on children’s behaviors has not been systematically evaluated. The objective of this study was to evaluate the effects of a conditional cash transfer on children’s behavior by using a quasi-experimental design.

Study Results

Participation in Oportunidades was associated with a 10% decrement in aggressive/oppositional symptoms but was not associated with significant decrements in anxiety/depressive symptoms or total problem behaviors while controlling for covariates. Effects of treatment did not differ by children’s gender or ethnicity. Although this large-scale conditional cash transfer program for poor Mexican families did not directly address children’s behavior problems, it found evidence of indirect effects on children’s behavior. Results suggest that interventions that focus on investing in basic human capital needs may exert longer term ripple effects on children’s development.

Intervention: Conditional cash transfer program

Journal Publication: Ozer, Emily J., Lia CH Fernald, James G. Manley, and Paul J. Gertler. "Effects of a conditional cash transfer program on children's behavior problems." Pediatrics 123, no. 4 (2009): e630-e637. https://doi.org/10.1542/peds.2008-2882

Study Overview

The objective is to evaluate the impact of Mexico’s conditional cash transfer programme on the quality of health care received by poor women. Quality is measured by maternal reports of prenatal care procedures received that correspond with clinical guidelines.

Study Results

Oportunidades beneficiaries received 12.2% more prenatal procedures compared with non-beneficiaries (adjusted mean 78.9, 95% Confidence Interval (CI): 77.5–80.3; P < 0.001). The Oportunidades conditional cash transfer programme is associated with better quality of prenatal care for low-income, rural women in Mexico. This result is probably a manifestation of the programme's empowerment goal, by encouraging beneficiaries to be informed and active health consumers.

Intervention: Conditional cash transfer program

Journal Publication: Barber, Sarah L., and Paul J. Gertler. "Empowering women to obtain high quality care: evidence from an evaluation of Mexico's conditional cash transfer programme." Health Policy and Planning 24, no. 1 (2009): 18-25. https://doi.org/10.1093/heapol/czn039

Study Overview

In this paper, we use data from Indonesia to evaluate whether medical doctors (MDs), nurses, and midwives predict quality of care, and whether quality is associated with child growth. One in three children globally is stunted in growth. Many of the conditions that promote child stunting are amenable to quality care provided by skilled health workers.

Study Results

Increases in the number of MDs and nurses predict increases in the quality of care. Higher quality care is associated with child length in centimeters and stunting. Simulations suggest that large health gains among children under 24 months of age result by placing MDs where none are available. Improvements in child health could be made by increasing the number of qualified health staff. The returns to investing in improvements in human resources for health are high.

Intervention: Ensuring availability of qualified staffing

Journal Publication: Barber, Sarah L., and Paul J. Gertler. "Health workers, quality of care, and child health: Simulating the relationships between increases in health staffing and child length." Health Policy 91, no. 2 (2009): 148-155. https://doi.org/10.1016/j.healthpol.2008.12.001

Study Overview

We investigate the impact of a large-scale Mexican program to replace dirt floors with cement floors on child health and adult happiness. We find that replacing dirt floors with cement significantly improves the health of young children measured by decreases in the incidence of parasitic infestations, diarrhea, and the prevalence of anemia, and an improvement in children’s cognitive development. Additionally, we find significant improvements in adult welfare measured by increased satisfaction with their housing and quality of life, as well as by lower scores on depression and perceived stress scales.

Study Results

In this paper, we show that Piso Firme improves child health and cognitive development, mainly by reducing the incidence of intestinal parasites that are not treatable with albendazole or other common deworming drugs employed in developing countries. We also show that Piso Firme improves adult welfare as measured by mental health and satisfaction with housing. Our results have a number of important policy implications. First, housing improvement appears to be an important component of anti-poverty interventions, and our results show that major improvements in child health and cognitive development can be achieved by this particular kind of interventions. Second, replacing dirt floors with cement floors appears to be, in this case, a cost-effective policy for improving child cognitive development. Third, de-worming drugs such as Albendazole are only partial substitutes for cement floors.

Intervention: Replacing dirt floors with cement floors (Piso Firme)

Journal Publication: Cattaneo, Matias D., Sebastian Galiani, Paul J. Gertler, Sebastian Martinez, and Rocio Titiunik. "Housing, health, and happiness." American Economic Journal: Economic Policy 1, no. 1 (2009): 75-105. DOI: 10.1257/pol.1.1.75

Study Overview

We explore how firm capabilities affect the diffusion of technology brought with foreign direct investment (FDI). Using a panel dataset on Indonesian manufacturers from 1988 to 1996, we measure how the productivity of differing domestic firms responds to the entry of multinational competitors. We find that firms with investments in research and development and firms with highly educated employees adopt more technology from foreign entrants than others. In contrast, firms that have a small “technology gap,” meaning that they are close to the international best-practice frontier, benefit less than firms with weak prior technical competency. This finding suggests that the marginal return to new knowledge is greater for firms that have more room to “catch up” than it is for already competitive firms.

Study Results

Our major result is to find that firm capabilities affect technology adoption in three ways. Firms with greater absorptive capacity, higher levels of human capital, but with lower prior technical competency, are the prime beneficiaries of technology from FDI. Whereas one might initially think that more competent firms could benefit the most from FDI, the evidence suggests that firms far from the best-practice frontier gain more. We believe the “low hanging fruit” idea explains this result: firms with poor initial technology are more likely to encounter new processes that yield high returns at low cost. This explanation is partly conditional on the idea that technology brought with FDI is relatively mature and can be adopted without extensive further development.

Journal Publication: Blalock, Garrick, and Paul J. Gertler. "How firm capabilities affect who benefits from foreign technology." Journal of Development Economics 90, no. 2 (2009): 192-199. https://doi.org/10.1016/j.jdeveco.2008.11.011

Study Overview

The theoretical case for universal pre-primary education is strong. However, the empirical foundation is less so. In this paper, we contribute to the empirical case by investigating the effect of a large expansion of universal pre-primary education on subsequent primary school performance in Argentina. We estimate that one year of pre-primary school increases average third grade test scores by 8% of a mean or by 23% of the standard deviation of the distribution of test scores. We also find that pre-primary school attendance positively affects student’s self-control in the third grade as measured by behaviors such as attention, effort, class participation, and discipline.

Study Results

Our evidence suggests that expanding pre-primary education is an effective instrument to improve long-term academic performance. In addition, it provides a more benign interpretation to the maternal work literature that claims that separating children from their mothers early in life is detrimental to cognitive development. Specifically, it is not separating young children from their mothers that matters, but rather what the children do during separation. Our results imply that separating children age 3-5 from their mothers can have positive effects if they are placed in a high quality pre-primary education setting.

Intervention: Pre-primary school education

Journal Publication: Berlinski, Samuel, Sebastian Galiani, and Paul J. Gertler. "The effect of pre-primary education on primary school performance." Journal of Public Economics 93, no. 1-2 (2009): 219-234.

Study Overview

The cash component of Oportunidades, a large conditional cash transfer (CCT) program in Mexico, has previously been shown to be associated with better outcomes for child growth and development. The objective of this analysis was to determine whether the cash transfers were also associated with positive outcomes for adult health. Oportunidades was originally randomized across 506 rural (<2500 inhabitants) communities assigned to immediate incorporation into the program in 1997 or incorporation 18 mo later. Adults (n = 1649 early, n = 2039 late intervention) aged 18–65 y were then assessed in 2003. All of the households included in the analysis reported here complied with Oportunidades’s requirements for the entire period, but some received higher cumulative cash transfers because they were living in communities randomized to begin receiving transfers earlier and/or they accumulated cash at a faster rate because they had more school-aged children at baseline.

Study Results

Our primary findings were that a doubling of cumulative cash transfers to the household was associated with higher BMI, higher diastolic blood pressure, and higher prevalence of overweight, grade I obesity, and grade II obesity, while controlling for a wide range of covariates, including household composition at baseline. Oportunidades has been portrayed as a model for CCT programs worldwide, but the results reported here support the notion that the cash component of Oportunidades may be negatively associated with some adult health outcomes.

Intervention: Conditional cash transfer program

Journal Publication: Fernald, Lia CH, Paul J. Gertler, and Xiaohui Hou. "Cash component of conditional cash transfer program is associated with higher body mass index and blood pressure in adults." The Journal of Nutrition 138, no. 11 (2008): 2250-2257. https://doi.org/10.3945/jn.108.090506

Study Overview

We investigate whether capital market imperfections constrain investment during an emerging market financial crisis. Both large currency devaluations and banking sector failures characterize recent crises. Although a currency devaluation should increase exporters’ competitiveness and investment, a failing banking system may limit credit to these firms. Foreign-owned firms, which may have greater access to overseas financing but otherwise face the same investment prospects, provide an ideal control group for determining the effect of liquidity constraints. We test for liquidity constraints in Indonesia following the 1997 East Asian financial crisis, a period when the issuance of new domestic credit shrank rapidly. Exporters’ value added and employment increased after the crisis, suggesting that they profited from the devaluation and had sufficient cash flow to finance more workers. However, only exporters with foreign ownership increased their capital significantly.

Study Results

Our results suggest that liquidity constraints greatly retarded domestic-owned manufacturing firms’ ability to take advantage of improved terms of trade. Specifically, compared to foreign-owned exporters they had resembled before the crisis, after the crisis domestic-owned exporters had more than 20% lower employment and capital and more than 40% lower value added and materials usage. Our findings provide evidence that capital market imperfections may reduce exporters’ investment and thus amplify emerging market crises. Trade theory suggests that exporting firms should increase profits, increase material inputs, expand labor, and invest in new capital following a real devaluation. For domestic Indonesian exporters, however, we observe only the first three effects, but do not see increased investment. Liquidity constraints are a likely explanation.

Journal Publication: Blalock, Garrick, Paul J. Gertler, and David I. Levine. "Financial constraints on investment in an emerging market crisis." Journal of Monetary Economics 55, no. 3 (2008): 568-591. https://doi.org/10.1016/j.jmoneco.2008.01.005

Study Overview

Governments around the world are seeking to address the increasing prevalence of obesity and hypertension. Our objective was to evaluate the effect of an incentive-based development program (Oportunidades, formerly Progresa) on body mass index (BMI), blood pressure, and self-reported health.

Study Results

Age- and sex-adjusted BMI was lower in adults from intervention communities than in those from control communities, as was the prevalence of obesity, and overweight; these results were attenuated after covariates were included. Adults in intervention communities had a lower combined prevalence of uncontrolled hypertension when adjusting for all covariates. Mean systolic and diastolic blood pressures were significantly lower in the intervention communities after all covariates were included, and self-reported health outcomes were better. Participation in Oportunidades, a large-scale cash-transfer program, was associated with lower prevalence of obesity and hypertension and better self-reported health in adults in rural Mexico.

Intervention: Conditional cash transfer program

Journal Publication: Fernald, Lia CH, Xiaohui Hou, and Paul J. Gertler. "Oportunidades program participation and body mass index, blood pressure, and self-reported health in Mexican adults." Preventing Chronic Disease 5, no. 3 (2008): A81. PMCID: PMC2483550, PMID: 18558031

Study Overview

Many governments have implemented conditional cash transfer (CCT) programmes with the goal of improving options for poor families through interventions in health, nutrition, and education. Families enrolled in CCT programmes receive cash in exchange for complying with certain conditions: preventive health requirements and nutrition supplementation, education, and monitoring designed to improve health outcomes and promote positive behaviour change. Our aim was to disaggregate the effects of cash transfer from those of other programme components.

Study Results

A doubling of cash transfers was associated with higher height-for-age Z score, lower prevalence of stunting, lower body-mass index for age percentile, and lower prevalence of being overweight. A doubling of cash transfers was also associated with children doing better on a scale of motor development, three scales of cognitive development, and with receptive language. Our results suggest that the cash transfer component of Oportunidades is associated with better outcomes in child health, growth, and development.

Intervention: Conditional cash transfer program

Journal Publication: Fernald, Lia CH, Paul J. Gertler, and Lynnette M. Neufeld. "Role of cash in conditional cash transfer programmes for child health, growth, and development: an analysis of Mexico's Oportunidades." The Lancet 371, no. 9615 (2008): 828-837. DOI: 10.1016/S0140-6736(08)60382-7

Study Overview

The decentralization of public services is a major feature of institutional innovation. The main argument in support of decentralization is that it brings decisions closer to the people, thereby alleviating information asymmetries and improving accountability. However, decentralization can also degrade service provision in poor communities that lack the ability to voice and defend their preferences. In this paper, we analyze the average and distributional effects of school decentralization on educational quality in Argentina.

Study Results

We find that decentralization had an overall positive impact on student test scores. The decentralization gains, however, did not reach the poor. Thus, although “bringing decisions closer to the people” may help the good get better, the already disadvantaged may not receive these benefits.

Journal Publication: Galiani, Sebastian, Paul J. Gertler, and Ernesto Schargrodsky. "School decentralization: Helping the good get better, but leaving the poor behind." Journal of Public Economics 92, no. 10-11 (2008): 2106-2120. https://doi.org/10.1016/j.jpubeco.2008.05.004

Study Overview

The objective is to investigate factors predicting the quality of care received using a nationally representative dataset from Indonesia. The study combines two surveys in 13 provinces: a household survey of 2451 women who delivered a live birth in 1992–1998, and a facility survey that measured quality available from outpatient providers.

Study Results

High facility quality predicts an increase in quality received. Although poor households have access to the same or higher quality care compared with the least poor, the poor receive lower levels of quality. In remote regions, quality received rises with increasing levels of maternal education and household wealth. Improving health provider knowledge, and increasing household financial resources and information could redress inequalities in quality received among the poor and least educated.

Intervention: Training, organizational reform, financial incentives for health providers or patients

Journal Publication: Barber, Sarah L., and Paul J. Gertler. "Strategies that promote high quality care in Indonesia." Health Policy 88, no. 2-3 (2008): 339-347. https://doi.org/10.1016/j.healthpol.2008.04.003

Study Overview

The objective is to evaluate the impact of Oportunidades, a large-scale, conditional cash transfer programme in Mexico, on birthweight. The programme provides cash transfers to low-income, rural households in Mexico, conditional on accepting nutritional supplements health education, and health care.

Study Results

Many governments have turned to CCT programmes as a means of improving the health and schooling of children born into poor families. By providing money directly to poor households, conditional cash transfers aim to better target the poor and overcome household financial constraints in accessing services. We find that the programme contributed to higher birthweight and lower incidence of low birthweight among beneficiary women.

Intervention: Conditional cash transfer program

Journal Publication: Barber, Sarah L., and Paul J. Gertler. "The impact of Mexico’s conditional cash transfer programme, Oportunidades, on birthweight." Tropical Medicine & International Health 13, no. 11 (2008): 1405-1414. https://doi.org/10.1111/j.1365-3156.2008.02157.x

Study Overview

We hypothesize that multinational firms operating in emerging markets transfer technology to local suppliers to increase their productivity and to lower input prices. To avoid hold-up by any single supplier, the foreign firm must make the technology widely available. This technology diffusion induces entry and more competition which lowers prices in the supply market. As a result, not just the foreign-owned firm, but all firms downstream of that supply market obtain lower prices. We test this hypothesis using a panel dataset of Indonesian manufacturing establishments.

Study Results

We find strong evidence of productivity gains, greater competition, and lower prices among local firms in markets that supply foreign entrants. The technology transfer is Pareto improving — output and profits increase for firms in both the supplier and buyer sectors. Further, the technology transfer generates an externality that benefits buyers in other sectors downstream from the supply sector as well. This externality may provide a justification for policy intervention to encourage foreign investment.

Intervention: Policy to encourage foreign investment

Journal Publication: Blalock, Garrick, and Paul J. Gertler. "Welfare gains from foreign direct investment through technology transfer to local suppliers." Journal of International Economics 74, no. 2 (2008): 402-421. https://doi.org/10.1016/j.jinteco.2007.05.011

Study Overview

This paper is the third in the Child Development Series. The first paper showed that more than 200 million children under 5 years of age in developing countries do not reach their developmental potential. The second paper identified four well-documented risks: stunting, iodine deficiency, iron deficiency anaemia, and inadequate cognitive stimulation, plus four potential risks based on epidemiological evidence: maternal depression, violence exposure, environmental contamination, and malaria. This paper assesses strategies to promote child development and to prevent or ameliorate the loss of developmental potential. The most effective early child development programmes provide direct learning experiences to children and families, are targeted toward younger and disadvantaged children, are of longer duration, high quality, and high intensity, and are integrated with family support, health, nutrition, or educational systems and services. Despite convincing evidence, programme coverage is low. To achieve the Millennium Development Goals of reducing poverty and ensuring primary school completion for both girls and boys, governments and civil society should consider expanding high quality, cost-effective early child development programmes.

Study Results

Effective interventions are available to reduce the developmental loss currently estimated to aff ect more than 200 million children under 5 years of age in developing countries, by promoting child development and preventing or ameliorating developmental loss. The most effective interventions are comprehensive programmes for younger and disadvantaged children and families that are of adequate duration, intensity, quality, and are integrated with health and nutrition services. Providing services directly to children and including an active parenting and skill-building component is a more effective strategy than providing information alone

Intervention: Cost-effective early child development programs

Journal Publication: Engle, Patrice L., Maureen M. Black, Jere R. Behrman, Meena Cabral De Mello, Paul J. Gertler, Lydia Kapiriri, Reynaldo Martorell, and Mary Eming Young. "Strategies to avoid the loss of developmental potential in more than 200 million children in the developing world." The Lancet 369, no. 9557 (2007): 229-242. DOI: 10.1016/S0140-6736(07)60112-3

Study Overview

Country studies from Indonesia, Tanzania, India, Paraguay, and Mexico document the quality of medical advice and variation in practice quality across a number of dimensions. This overview paper serves three purposes. First, the studies use several different measures; we contextualize these measures and discuss how they relate to each other. Second, we propose a three-way decomposition to analyze variations in the quality of care. These variations can arise from inequalities in access, inequalities in choices, or inequalities arising from discrimination. We discuss common elements across the studies and draw policy implications for future research and advocacy.

Study Results

The overall quality of care documented in these studies is low, although there is considerable variation across countries and even within countries over time. These studies present a strong case that despite very different settings, the quality of medical advice can and should be measured. They also provide evidence that increasing the availability of medical care is not enough. Variations in practice quality rather than variations in availability and structural quality are more likely to explain a large fraction of the variance in health outcomes, even in low-income settings.

Journal Publication: Das, Jishnu, and Paul J. Gertler. "Variations in practice quality in five low-income countries: a conceptual overview." Health Affairs 26, no. Suppl2 (2007): w296-w309. https://doi.org/10.1377/hlthaff.26.3.w296

Study Overview

Quality is high on the Mexican health policy agenda. In this paper we evaluate the quality of prenatal care for rural low-income women. Women who obtained care from private practitioners and non-MDs received fewer procedures on average. Poverty predicts poor quality; however, indigenous women in private settings received fewer procedures, after household wealth was controlled for. We recommend strengthening clinical skills and providing incentives to adhere to quality standards. Quality reporting could promote informed employer care-purchasing and individual care-seeking choices. The national health reforms should be monitored to determine their success in not only increasing access among the poor and indigenous but also ensuring that such care meets quality norms.

Study Results

Women who used public facilities were poorer than those who used private settings, as measured by fewer households with piped water and solid wall construction and higher household spending on food—a key indicator of poverty. They were also slightly older (29.9 years compared with 28.8 years) and had experienced more pregnancies; moreover, a higher proportion also had previous negative birth outcomes. We found major variations in prenatal care quality by provider qualifications, clinical settings, income, and indigenous status.

Journal Publication: Barber, Sarah L., Stefano M. Bertozzi, and Paul J. Gertler. "Variations In Prenatal Care Quality For The Rural Poor In Mexico." Health Affairs 26, no. Suppl2 (2007): w310-w323. https://doi.org/10.1377/hlthaff.26.3.w310

Study Overview

Using a representative cross-section of health care providers in Indonesia, we describe variations in prenatal, child, and adult care quality. Quality is measured as knowledge about clinical guidelines. Public health centers offer above-average-quality prenatal care, and private physicians provide high-quality curative care. Private nurses offer below-average care, as do most providers in the more remote regions of Outer Java-Bali. The poor and wealthy have access to the same levels of quality; however, the poorest women report receiving fewer prenatal procedures. Recommendations include improving the professional development of nurses in private settings, testing quality improvements in Outer Java-Bali, and investigating wealth disparities in quality received.

Study Results

There is increasing recognition that low quality contributes to poor health status in low- and middle-income settings. Variations in clinical quality reflect knowledge, but they are also a manifestation of the overarching educational, policy, and regulatory frameworks upon which the health system is based. Training could address quality deficiencies related to skills. Because nurses are a prominent source of health care, strengthening their professional development and regulation would likely have a large impact on quality

Journal Publication: Barber, Sarah L., Paul J. Gertler, and Pandu Harimurti. "Differences In Access To High-Quality Outpatient Care In Indonesia" Health Affairs 26, no. Suppl2 (2007): w352-w366. https://doi.org/10.1377/hlthaff.26.3.w352

Study Overview

This article estimates the relationship between changes in industrialization and changes in social networks measures in Indonesia during 1985–97 using repeated cross sections of nationally representative surveys. We analyze a rich set of social interaction measures, including various measures of voluntary associational activity, levels of trust, and informal cooperation.

Study Results

Districts that experienced rapid industrialization showed significant increases in most measures of social interaction. However, districts that neighbor rapidly industrializing areas exhibited high rates of out‐migration, significantly fewer community credit cooperatives, and a reduction in “mutual cooperation” as assessed by village elders. Manufacturing growth can be thought of as a proxy for income growth here. The findings are contrary to several recent claims regarding the role of social capital in economic development.