Self-employed cash transfer recipients of the Urban Productive Safety Net Program (UPSNP) receive monthly cash transfers through a public works program, and receive business training and a grant to help them start and/or expand their business as a means of improving their livelihoods. To boost the impacts of these business trainings and grants, we designed and tested a suite of behaviorally informed interventions to help recipients reach their business goals by planning ahead and taking the steps necessary to start or expand their business. Recipients that received our designs were 6% more likely to have made a plan for how they would allocate their business grant.
Rapid population growth, armed conflicts, fuel and food price shocks, recurrent droughts, and other natural disasters have increased hardships among the urban population in Ethiopia. To reduce urban food insecurity, poverty, and vulnerability, the Government of Ethiopia introduced the Urban Productive Safety Net Project (UPSNP), a comprehensive social protection program that provides monthly cash transfers to recipients that are able to work through a public works program. These recipients also receive basic business and skills trainings alongside a one-time grant to help them start or expand their businesses. Despite these supports, recipients have found it difficult to take the preparatory steps needed to start or expand their businesses.
We conducted interviews and focus groups with cash transfer recipients and program staff to understand the challenges recipients faced in preparing to start or expand their businesses. We then designed behaviorally informed interventions and implemented them into the program’s self-employment pathway. These designs included a self-affirmation activity, a guide to choosing the right business, a road map of steps to starting a business, an allocation planning activity, a partitioning pouch, and posters with example businesses.
We tested these behavioral interventions in five locations around Ethiopia with 2,350 recipients. The behavioral designs, and, in particular, the allocation planning activity increased the likelihood that recipients made plans to allocate their money towards their business versus household expenses by 6% compared to those that did not receive any of the behavioral interventions. Our intervention was also 5.7 times more effective at getting recipients to make a plan for spending their business grant than simply giving them the equivalent cash amount it costs to implement them.
Behaviorally informed interventions can have a positive impact on cash transfer recipients, even for those trying to start or expand a business, despite the ongoing civil conflict and tough conditions in Ethiopia. Our findings strengthen existing evidence around the impact, cost-effectiveness, and value of goal-setting and plan-making activities, such as allocation planning, when delivered in conjunction with cash transfer programs.