NSF Award
2315009
This award will support research that uses field experiments (randomized controlled trial [RCT]) to understand how multiple overlapping constraints on the poor or near poor turn into a poverty trap. The research takes advantage of the roll-out of a large anti-poverty program to conduct this RCT. The research then investigates the mechanisms through which the widely used and most successful anti-poverty program---the graduation program---which offers recipients monthly cash support, training in entrepreneurship, mentorship, and one-time business startup takes effect. This research focuses on several outcomes stemming from the intervention. Unlike previous studies on graduation programs, this research further studies whether encouraging participants to start several microenterprises at the same time leads to overcrowding, thus leading to failure of these enterprises. In addition to direct effects of the treatment, the researchers will also study the spillover effects of the treatment. The researchers will collect data from program participants at regular short intervals on several outcomes that allows them to evaluate outcomes that are difficult to evaluate at the end of the study. The results of this study will help improve the design and implementation of anti-poverty programs and help establish the US as a global leader in poverty reduction policies. <br/><br/>This research project leverages the roll-out of a large anti-poverty program to use a randomized control trial (RCT) method to study how multiple overlapping constraints can turn into a poverty trap and study the mechanisms behind the success of graduation programs for the ultra-poor. In addition to the direct effects, the researchers will investigate the indirect effects of the intervention as well as investigate whether encouraging graduates to start several microenterprises focusing on similar product or services in the same neighborhoods induces unnecessary competition and thus lead to failure and whether coordination help entrepreneurs diversity to achieve success. Thes questions are tested by exogenously changing the level of competition by randomly varying the number of treated households at the community level. An important aspect of this research is the high frequency data that will be collected that allows the researchers to track the dynamics of graduates’ decision making and success as well test a shock-based model of poverty traps. The results of this study will help improve the design and implementation of anti-poverty programs and help establish the US as a global leader in poverty reduction policies.<br/><br/>This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.
