Changing Households’ Investments and Aspirations through Social Interactions : Evidence from a Randomized Transfer Program

Macours, KarenVakis, Renos2012-03-192012-03-192009-11-01https://hdl.handle.net/10986/4330Low aspirations can limit households investments and contribute to sustained poverty. Vice versa, increased aspirations can lead to investment and upward mobility. Yet how aspirations are formed is not always well understood. This paper analyzes the role of social interactions in determining aspirations in the context of a program aimed at increasing households' investments. The causal effect of social interactions is identified through the randomized assignment of leaders and other beneficiaries to three different interventions within each treatment community. Social interactions are found to affect households attitudes toward the future and to amplify program impacts on investments in human capital and productive activities. The empirical evidence indicates that communication with motivated and successful nearby leaders can lead to higher aspirations and corresponding investment behavior.CC BY 3.0 IGOAFFILIATED ORGANIZATIONSASSET BASEATTENDANCE REQUIREMENTATTRITIONBANK POLICYBENEFICIARIESBENEFICIARYBEQUESTCAPITAL INVESTMENTCAPITAL INVESTMENTSCASH TRANSFERCASH TRANSFERSCHECKSCOGNITIVE DEVELOPMENTCOMMUNITIESDESCRIPTIONDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSDWELLINGSEARLY CHILDHOOD DEVELOPMENTECONOMIC THEORYECONOMICSEDUCATION SPENDINGEDUCATIONAL OUTCOMESEMPLOYMENTENROLLMENTEQUALITYEXPENDITURESFEDERAL RESERVEFEDERAL RESERVE BANKFEMALEFINANCIAL SUPPORTFREE PRESSGAME THEORYHOLDINGSHOMESHOUSEHOLD INCOMEHOUSEHOLDSHOUSESHOUSINGHUMAN CAPITALINCOME LEVELINCOME LEVELSINFORMATION ASYMMETRIESINTERNATIONAL BANKINTERVENTIONINTERVENTIONSINVESTINGINVESTMENT BEHAVIORINVESTMENT GRANTSLABOR MARKETLEADERSHIPLEARNINGLIQUIDITYLIQUIDITY CONSTRAINTSLIVING STANDARDSLOCAL ECONOMYMARKET ACCESSMENTAL HEALTHMICROCREDITMICROFINANCEMOBILITYMOTIVATIONNEIGHBORHOODNUMERACYNUTRITIONPOLITICAL ECONOMYPRICE CHANGESPRIMARY CAREGIVERSPRIMARY SCHOOLPRODUCTIVE CAPITALPRODUCTIVE INVESTMENTPRODUCTIVE INVESTMENTSPROFITABILITYREGULAR ATTENDANCERETURNSRETURNS TO EDUCATIONRISK MANAGEMENTRISK MANAGEMENT STRATEGIESSAFETYSAFETY NETSCHOOL ATTENDANCESCHOOLINGSKILLS TRAININGSOCIAL MOVEMENTSSOCIAL NETWORKSSOCIAL SCIENCESTOCKSTEACHERSTRANSACTIONTRANSACTION COSTSTRANSPARENCYTRUST FUNDSVOCATIONAL TRAININGWAGESChanging Households’ Investments and Aspirations through Social Interactions : Evidence from a Randomized Transfer ProgramWorld Bank10.1596/1813-9450-5137