Cash transfers narrow gender gaps but don't alter babies' growth outcomes

The Haryana cabinet last week approved the Deen Dayal Laado Laxmi Yojana, under which all eligible women in the state will receive monthly assistance of ₹2,100 from September 25, fulfilling a key election promise of the ruling Bharatiya Janata Party (BJP). With this, Haryana becomes the 15th state to launch, or promise to launch, a scheme for monthly direct cash transfers to women in recent years.

 

According to a recent assessment by The Economist, India has seen a remarkable surge in cash transfer programmes targeted at women, rising from virtually zero in 2018 to 0.6 per cent of GDP by 2024. These schemes now reach more than 130 million women across the country.

 

While several studies and reports have examined the impact of cash transfers on women, including their voting behaviour, a new working paper by the National Bureau of Economic Research — titled “Maternal Cash Transfers for Gender Equity and Child Development: Experimental Evidence from India” — sheds further light on the effects of unconditional transfers on women’s well-being.

 

The paper, authored by Jeffrey Weaver, Sandip Sukhtankar, Paul Niehaus, and Karthik Muralidharan, studied the impact of unconditional cash transfers to new mothers in India through a large-scale randomised evaluation. It found that households receiving transfers saw a 9.6–15.5 per cent increase in calorie intake for mothers and children, along with gains in nutrient consumption. Gender disparities in food consumption narrowed.

 

The authors also observed significant improvements in children’s functional development. However, anthropometric indicators for children did not, on average, improve as a result of the transfers.

 

One of the paper’s major findings was that labelled or unconditional cash transfers to women reduce intra-household gender inequality. “Since maternal calorie consumption was lower than the household average, proportionate increases in absolute calorie consumption for mothers implied a greater relative increase for them. This resulted in more equal food consumption. Further, the treatment effect on maternal calorie intake in year two was nearly double the effect in year one. This is consistent with growing empowerment over time, perhaps because women became more accustomed to receiving and collecting money,” the paper said.

 

The study was based on the evaluation of a maternal cash transfer programme in Jharkhand. Around 480 Anganwadi Centres (AWCs), representing 90 per cent in the state, were selected. These centres registered pregnant women in their catchment areas, yielding a sample of about 2,400 women. Half the AWCs were then randomly selected. From the birth of their child, registered mothers at these AWCs received monthly payments of ₹500 — roughly 10 per cent of average household consumption.

 

Transfers continued for two years, amounting to ₹12,000 in total, and were equivalent in annual value to the Centre’s flagship maternal transfer programme, the Pradhan Mantri Matru Vandana Yojana. The targeted mothers also received messages encouraging them to use the funds for nutritious food.

 

Although the study does not directly relate to schemes such as Madhya Pradesh’s Ladli Behna Yojana, which is not a maternity benefit scheme, Muralidharan of the University of California, San Diego, said the findings offer guidance on the impact of unconditional schemes like it. “Jharkhand is one of the most patriarchal places. If you take it to Maharashtra, or take it to Karnataka, where the incomes are higher and women are more educated and empowered to begin with… the context will matter. This is a study done in one of India’s poorest states which is also a highly patriarchal environment,” he told Business Standard.

 

He said he was confident that money in women’s accounts — by any means — is likely to improve women’s empowerment and control over household resources. “I feel very confident in making that claim for other schemes as well,” Muralidharan said.

 

He said the research also showed that conditional cash transfers to women increased food consumption, dietary diversity, and nutrient intake in children.

 

But despite this, there was no improvement in anthropometric indicators for the targeted child (aged between 0 and 3 years). “At the age three, we have not seen any impact on average height and weight for age,” Muralidharan noted.

 

He added that child growth might improve with better sanitation practices, not just the construction of toilets. The research showed that when mothers received cash directly, the anthropometrics of older siblings (those under 10) improved. “This is consistent with the fact that when the mother gets money, the older children get more benefit,” Muralidharan said.

 

On the reduction in gender inequality due to cash transfers, he said the findings offered perhaps the most robust measurement of intra-household inequality in any such study in India. 

 

“Data shows that there is pre-existing gender inequality in terms of how much women are eating — which is around 17 per cent less calories than men. Even during breastfeeding, when the ICMR guidelines for women say that they should have another 500 calories a day, we are not seeing that increase in the control group,” Muralidharan added. However, because of cash transfers, it was found “very robustly” that increased calories were being consumed “at least proportionately, and over time, disproportionately” by women.

 

Clearly, the new study casts fresh light on the wider debate over the efficacy of monthly cash transfers to women.