The article examines the effects of a substantial, one-off, unconditional cash transfer to refugee families in Uganda. Uganda hosts over 1.5 million refugees and asylum seekers.
The authors examine the effects of a US$1,000 cash transfer by the international NGO GiveDirectly to refugees in Kiryandongo settlement in Uganda distributed over two years until all households were reached. The authors compared early recipients (treatment group) with those awaiting the transfer (control group) at the study’s conclusion. The analysis draws on data collected from a sample of 1,090 households. The authors complemented quantitative findings with a longitudinal panel of semi-structured qualitative interviews.
Main findings:
- The transfer boosted household consumption. Households that received the transfer experienced an 11 percent increase in household monthly consumption, equivalent to and additional US$92 per month. This rise was primarily due to households opting for more expensive but preferred items like animal products and vegetables, which are not included in the WFP food rations.
- The cash transfer increased asset values and improved housing conditions. Recipients’ asset holdings increased by an average of US$3,937, compared to the control mean of US$6,495, primarily driven by an increase in the value of house and land holdings. The funds were often invested in constructing new homes or upgrading existing ones, leading to better housing quality, as evidenced by an increase in the number of rooms and improvements in the construction of walls, floors, and roofs.
- The transfer boosted business ownership and revenue. Recipients were 8.2 percentage points more likely to own a business, a 37 percent increase from the control mean. Additionally, recipients generated US$41 more per month in business revenue compared to the control mean of US$63, mainly from small shops in the treatment group. Qualitative research suggests that business formation might have been higher without COVID-19 disruptions, as many households had plans to start businesses thwarted by lockdowns. The ability to invest the transfer effectively varied; some managed to establish successful businesses and create lasting income streams, while others remained dependent on humanitarian aid post-transfer.
- The transfer increased self-reliance. Transfer recipients experienced a 0.16 standard deviation increase in a self-reliance index, primarily due to decreased household debt.
- The transfer significantly increased psychological well-being. The cash transfer improved psychological wellbeing, with recipients showing a 0.28 standard deviation improvement in a wellbeing index, with consistent gains across mental health metrics such as depression, stress, happiness, and life satisfaction.
- There were positive but insignificant effects on agricultural production and revenue, food security, household dependency ratio, migration, employment, and female empowerment.
The authors conclude that large one-off cash transfers for refugees in situations of protracted displacement enabled them to make meaningful progress towards self-reliance through investments and asset accumulation. However, the magnitude and mixed nature of the results suggest that transfers alone are insufficient to deliver lasting self-reliance to those in protracted displacement, especially in the context of multiple shocks.