Failure vs. Displacement: Why an Innovative Anti-Poverty Program Showed No Net Impact

We present results from a randomized trial of an innovative anti-poverty program in India. Instead of a safety net, the program provides "ultra-poor" households with inputs to create a new livelihood and attain economic independence. We find no statistically significant evidence of lasting net impact on consumption, income or asset accumulation. The main impact was the re-optimization of time use: sharp gains in income from the new livelihood were fully offset by lower earnings from wage labor. The result highlights how the existence of alternative economic options shapes net impacts and external validity.

Morduch et al (2012)


Rural.Livestock asset ($140). Asset specific training.325% more time spent tending to animals relative to baseline wage labor: 22%. No impact on earnings. No impact on per capita expenditure. Less time in wage labor (1 hours per day).Women.