Effect of Older Persons’ Cash Transfers On Household Economic Status in Butula Sub-County, Busia County - Kenya

Abstract

The general objective of the study was to determine the effect of older persons’ cash transfers on household economy in Butula sub-county of Busia county, Kenya. The study was guided by specific objectives that examined the income effects of older persons’ cash transfers on household economic status, assessed the adult labor supply effects of older persons’ cash transfers on household economomic status, and analyzed the household risk management impacts of older persons’ cash transfers on household economic status in Butula sub-county, Busia County - Kenya. The study adopted the ex-post facto research design. The primary target populations in this study were beneficiary households of OPCT in Butula Sub-County, Busia County of Kenya who were approximately 150 in total, and the sample frame comprised of the older persons’ households in Butula Sub-county. The study applied a quasi-experimental research design so as to ensure it lacked random assignment to treatment of the population. The sample size included all the 150 households that were the study population. A quantitative questionnaire was the main data collection instrument to be deployed in gathering data from the study participants. Data analysis tested the cause-effect relationships between the endogenous and exogenous variables, where descriptive and inferential statistical methods were deployed. Descriptive analysis of data consists of frequencies and percentages for the respondents' responses and overall mean scores, standard deviations, while inferential analysis focused on variable relations. This was achieved by use of Statistical Package for Social Sciences (SPSS) and presentations taking the form of tables and figures. The cash transfer programmes in Butula sub-county have facilitated the ability of the households in the county and sub-county to save for precautionary purposes and borrow money for use. The cash transfers have also helped the household in focusing on agriculture through investment in agricultural inputs (seeds, fertilizer and pesticide), investment in livestock, and increased productive outcome in terms of increased yields in household productivity which has ultimately increased the likelihood of these households to have food security for their consumption from their own production.The study revealed that the cash transfer programs in the sub-county have significantly increased the probability of overall work among male and female adults and has also reduced significantly the number of hours worked by pensioners who receive their first disbursement. The study revealed that the cash transfer program has significantly altered household labor supply while waiting for the future money transfer and the pension money program has enabled elderly householders to retire and reduce the time spent in active work. The indicated that beneficiaries of cash transfer programmes live in rural areas and they mainly depend on subsistence agriculture. Cash transfers programs in the sub-county facilitate the ability of households to reduce their risk-coping strategies and to overcome obstacles that block their access to credit or cash. These cash transfers programs have increased productivity through other income-generating investments for these households and this has protected the households from shocks resulting from detrimental risk-coping strategies. The study concludes that a source of income that is guaranteed and predictable helps in lifting households’ liquidity facilitates the ability of the households to save for precautionary purposes and also facilitates the ability of the households to borrow money for use. It also concludes that, households that receive cash transfers tend to invest in household-managed economic activities and that the increase in labor participation from cash transfers has significantly reduced participation in self-employment and has increased participation in paid employment. The study recommends that agents tasked with the implementation of cash transfers should also teach the recipients about cash management. By providing accessible cash to the households without proper cash management training, the efforts provided by OPCT may be futile in future due to misuse.