Cash transfers, resilience and child labour in Ghana

This study examines the impacts of an unconditional cash transfer programme on cocoa-growing households in Ghana. The study was designed a randomized experiment and aimed to test whether cash transfers, implemented within a supply chain structure, can help reduce hazardous child labour, and what other impacts they have on children and their families in this context. The results show that the cash transfer reduced the likelihood of a child doing hazardous work in the past six months by 9.3 percentage points, which corresponded to a 16% reduction relative to the sample mean. The results also show that the cash transfer allowed households to build up wealth, measured through durable wealth items acquired during the cash payment period. Importantly, the cash transfer also made households more resilient to adverse shocks, such as sickness or unexpected losses of income. While adverse shocks were experienced by around two thirds of the households in both the control and the cash recipient groups, households that received cash transfers were less likely to reduce their food consumption as a consequence of the shock. Children benefitted in other ways too: their material wellbeing improved, as measured by the child's ownership of basic items such as a blanket and a second set of clothes. The cash transfers also protected children against adverse events. Among households that did not receive the cash transfer, child labour increased in the case of an adverse event. The results show that unconditional cash transfers paid to cocoa farmers within a supply chain structure in Ghana can help to prevent and address hazardous child labour. Notably, cash transfers can protect households and children against adverse shocks, such as sickness, bereavement in the family, income fluctuations or loss of agricultural production.

Keywords: cash transfers; child labour; shock resilience; Covid-19.