A proven approach to helping the ultra-poor

Anti-poverty research led by a Yale University economist may have cracked the data code for helping the world’s poorest citizens.

Gathering data from six countries, the researchers tested a comprehensive approach for helping ultra-poor citizens — those 1 billion people around the world living on less than $1.25 a day — increase their income and improve their health. The approach is known as the “Graduation model.” The study followed 21,000 of the world’s poorest people for three years.

The study appears May 14 in the journal Science.

“Being ultra-poor usually means more than just not having an income — like not enough food to eat, no way to save, no information, and low perception of their opportunities to escape their situation,” said Yale economist Dean Karlan, co-author of the study and founder of the New Haven-based non-profit Innovations for Poverty Action. “We tested an approach that addressed several factors at once, and found significant improvements, even three years after the program did the bulk of the work.”

The findings suggest that the approach works across a range of cultural, political, and economic variables that have been stumbling blocks in the past to combating poverty. The researchers tracked people in Ethiopia, Ghana, Honduras, India, Pakistan, and Peru. The program included six components over a two-year period:

  • An asset to use to make a living, such as livestock or goods to start an informal store
  • Training on how to manage the asset
  • Basic food or cash support to reduce the need to sell their new asset in an emergency
  • Frequent (usually weekly) coaching visits to reinforce skills, build confidence, and help participants handle any challenges
  • Health education or access to health care to stay healthy and able to work
  • A savings account to help put away money to invest or use in a future emergency

The researchers used a randomized, controlled trial that tracked people invited to participate in the two-year program, as well as people in another group who did not participate. The researchers compared the two groups to see how their lives changed up to a year after the program ended. Those in the program group had significantly more assets and savings, spent more time working, went hungry on fewer days, and experienced lower levels of stress and improved physical health.

The program saw positive returns in five of six countries, ranging from 133% in Ghana to 433% in India. For every dollar spent on the program in India, ultra-poor households saw $4.33 in long-term benefits.

The government of Ethiopia plans to expand the program to benefit 3 million people through the country’s Productive Safety Net Program, and the program already is being scaled up in Pakistan and India.

“Governments, aid organizations, and donors have been looking for something backed by real evidence showing it can help the poorest of the world, and this Graduation approach does exactly that,” said Annie Duflo, executive director of Innovations for Poverty Action.

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3 thoughts on “A proven approach to helping the ultra-poor”

  1. My previous comment is incomplete.

    The basic cause of poverty of all levels from the very poorest up to the below average income, is due to restricted rights for the opportunity to earn. This is mostly due to land access control as practiced by the government or the very rich who are speculating in the land values.

    In places where the restriction is due to education or racialism this can also be remedied by sensible governmental policies and behavior. And where the access to land is restricted by landlords, a tax on land values should be gradually introduced, to apply commonly over all of the useful land. The other kinds of taxation will no longer be needed when this tax on land values covers all of the rent, the other taxes can be stopped.

  2. So…to encapsulate the lesson. “Instead of giving a man a fish everyday for food, teach a man how to fish and you’ll feed him for life”.
    I believe this lesson has been around for a long, long time. Clearly our approach to welfare has failed. I’ll guarantee many will refuse to implement such a wonderful approach to life because it makes men independent.

  3. Don’t worry, it wont be long before these handouts find their way to those who own and control the rights for access to the surrounding land. When money is used to improve the present situation and if it also allows the poor to manage by themselves, it doesn’t take long for some of them to becomes sufficiently prosperous as to be able to exploit the rest, through rights to land access.

    The answer to poverty of all kinds is that rent for use of land is paid to the government so that those who otherwise would be kept off the useful land are now able to have equal opportunities to what was formally withheld.

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