An anti-poverty program was extensively tested across six countries for three years and yielded sustainable gains in individual wealth, income and general well-being.
In a study published in the journal Science, researchers discussed details of the "Graduation" program, which provided very poor people with a host of productive assets like livestock and complemented these assets with life skills coaching, health information and job training. The program was launched with the goal of examining if employing several means of helping the poor at the same time could effectively fight poverty.
With over 20,000 subjects involved, the study was able to produce increases of five percent for per capita income, 15 percent in assets, eight percent for food consumption and 96 percent in savings compared with individuals not enrolled in the "Graduation" program but are experiencing the same circumstances.
Specifically, the study was carried out in Peru, Ethiopia, Pakistan, Ghana, India and Honduras. About 48 percent of the subjects chosen to participate in the "Graduation" program had per capita consumption less than $1.25 per day. It was expected that the subjects' welfare would increase in the short run, but gains incurred during the study were able to last.
"They are happier, too," said Abhijit Banerjee from the Massachusetts Institute of Technology who is co-author of the study.
The "Graduation" program was first deployed in Bangladesh, intended to give the poor a "big push" to help alleviate poverty. According to Banerjee, the question to answer was: will durable consequences result from just one instance of intervening in the lives of the poor?
Participants in the study were involved in a one-time transfer of assets. Often, they were provided with animals like chickens or cows, which could be sources of income. This was supplemented with temporary support for spending, business training and frequent home visits for follow-ups while the subjects were encouraged to save up some of their money.
Based on its results, the study showed that the "Graduation" program could be effective, although some concerns were raised. The researchers are looking to explore these concerns further to determine what kind of modifications will address them. For now, the study proved that the poorest of the poor are not inherently incapable of improving their lives.
The study received funding support from the U.S. Agency for International Development, 3ie and the Ford Foundation. Other authors include: Esther Duflo, Christopher Udry, Nathanael Goldberg, Bram Thuysbaert, Dean Karlan, Jeremy Shapiro, Robert Osei and William Pariente.
Photo: Kristine Paulus | Flickr