Cash transfers and the supply of labor by poor households: Evidence from the livelihood empowerment against poverty program in Ghana

Robert D. Osei and Monica Lambon‐Quayefio - Review of Development Economics


The Livelihood Empowerment Against Poverty (LEAP) program is Ghana's first social protection program to provide cash and health insurance to the poor and vulnerable. This study looks beyond the direct impact of the program and examines the indirect impacts on labor transitions as well as the engagement of children and the elderly in the labor market. The study employs the combined propensity score matching and difference‐in‐difference technique to obtain robust estimates in examining the effect of the cash transfer program on labor shifts of beneficiaries. Overall, the paper finds that cash transfer programs can have productive impacts and dismisses the assertion that such grants end up making beneficiaries perpetually dependent. The heterogeneous analysis provides evidence that the results are differentiated by age but not by gender. Based on the evidence from this study, we recommend that as LEAP continues to expand and reach more beneficiaries in poor districts, it needs to ensure that the issue of complementarity of poverty reduction programs is a key feature of its design. Indeed, findings from the study point to the fact that graduation from cash transfer is possible and therefore, programs must seek to maximize this potential.