Cash transfers and women’s economic inclusion in rural Zambia

Abstract

This paper investigates whether an increase in exogenous income through the Child Grants model of the Social Cash Transfer programme in Zambia fosters economic inclusion among rural women. We conceptualize economic inclusion as a transformative process comprised of four pillars: productive capacity, saving capacity, women’s empowerment, and time preferences and expectations. Using experimental data, we find strong evidence of direct impacts of the Child Grant on productive and saving capacity, and time preferences and expectations of rural women. In addition to these direct impacts, we implement a mediation analysis to explore the potential mediating role of time preferences and expectations in affecting the other pillars of economic inclusion. Through this approach, we find indicative evidence of indirect and mutually reinforcing relationships between changes in time preferences and expectations brought about through the Child Grant and improvements in the productive and saving capacity of beneficiaries. These results suggest that cash transfers might be effective in promoting women’s economic inclusion, both through the direct monetary effect and through the mediated effect of time preferences and expectations.