Do unconditional cash transfers increase welfare in communities as a whole, even within households that do not receive them?

Development economists and policymakers frequently compare the benefits and costs of conditional versus unconditional cash transfers. In this VoxDev talk, Dennis Egger discusses an experiment in which large unconditional cash grants were given to some people living in rural villages in Kenya. Existing research has shown that households who receive these transfers benefit immensely. However, the literature is sparse when it comes to how these transfers affect the surrounding population that do not receive them. Fascinatingly, the experiment revealed that benefits even extended to households who did not receive a transfer. 

Editors' note: This talk is based on two PEDL projects. Found here and here.

Unconditional cash transfers Kenya General equilibrium effects Consumption Temptation goods Welfare