In village economics, women’s choices over labour activities are believed to be correlated with poverty. To test that argument, we evaluated BRAC’s Ultra-poor Graduation (UPG) program which provides livestock, classroom training, other supports and consumption allowances to village women to elevate them out of poverty. Conducting a large scare randomized control trial (RCT), we found that the poor are able to take on the work activities of the non-poor but face barriers to doing so, and interventions that remove these barriers lead to sustainable poverty reduction.
Researchers: Dr Oriana Bandiera; Dr Robin Burgess; Dr Selim Gulesci; Dr Imran Rasul; Dr Munshi Sulaiman; Dr Narayan C. Das
Partners: AusAid; BRAC; CIDA; FCDO; LSE; Oxfam
Timeline: 2007–2014
Status: Completed
Contact: Dr Narayan C. Das; narayan.das@bracu.ac.bd
Publications:
Context
As of today, around a billion people are deemed to be living in extreme poverty. Most of these people engage in low-skilled wage labour activities that are insecure and seasonal in nature. The relatively better-off people, in contrast, tend to engage in secure wage employment or employ others in the businesses they operate. This observation demands that any attempt to alleviate extreme poverty on a large scale mindful of the process of occupational change and understand how this process is linked to a paucity of capital and skills.
BRAC’s Ultra-poor Graduation (UPG) program provides a one-off transfer of assets and skills to the poorest women with the aim of instigating occupational change. All eligible women chose one of the six available livestock asset bundles from the asset menu and 91% of them chose an asset bundle containing at least one cow. Intuitively, if the poor face barriers to entering high-return work activities and this is what keeps them in poverty, we expect program beneficiaries to change their labour allocation and escape poverty once such barriers are removed.
This study is relevant to SDG 1 (no poverty), particularly to ending poverty in all its forms everywhere.
Research Questions
The key question of this study is whether poor women would be better off engaging in the same activities as their wealthier counterparts.
Methodology
For this study, we conducted a randomized control trial (RCT), covering over 21,000 households in 1,309 villages. Respondents were surveyed four times over a seven-year period. To estimate the impact of BRAC’s intervention, we applied the difference-in-difference (DiD) technique. We also utilised the analysis of covariance (ANCOVA) and quantile treatment effect (QTE) model to test the robustness of the findings and heterogeneity of the treatment effect.
Findings and Recommendations
Our findings show that the UPG program enables ultra-poor women to take on the labour market activities of better-off women in the same villages as they dramatically expand overall labour supply, principally by working more hours in livestock rearing. As their labour supply expands and their employment becomes more regular, they experience a 21 per cent increase in earnings, which allows them to accumulate further productive assets and set off on a sustainable trajectory out of poverty.
It is evident that enabling the poor to allocate their labour to the activities chosen by richer women in their villages may have a central role to play in eliminating extreme poverty. However, given that the UPG program has multiple components bundled together, we understand little so far about which elements are critical to unleashing this process of change. Getting a better sense of this, therefore, is a key priority. Understanding why we observe heterogeneity in program returns is also critical for gaining a better understanding of the determinants of poverty.
