The Impact of Shock-Responsive Social Cash Transfers: Evidence from an Aggregate Shock in Kenya

This study examines the effects of a nationwide shock-responsive social cash transfer scheme during an aggregate shock, with a focus on highly risk susceptible informal sector households in Kenya. Leveraging primary in-person survey data in a doubly robust difference-in-differences framework, we find that households receiving shock-responsive cash transfers were less likely to encounter income loss, poverty, and food scarcity compared to households not receiving them. The scheme also reduced the likelihood of engaging in costly risk coping such as selling productive assets. When comparing different pillars of the scheme with varying degrees of shock-responsiveness, we observe that the impacts were statistically significant only when payment cycles were pooled and the transfers were vertically scaled. The study adds to the global policy discussion on developing effective shock-responsive interventions, underscoring the merits of (adapted) social cash transfers during crises.