On 20 October 2016, Katia Covarrubias defended her PhD dissertation in Development Economics, entitled “Household Inequalities, Economic Constraints and Decision-Making Processes: Three Essays in Development Economics”, at the Graduate Institute. Professor Martina Viarengo presided the committee, which included Professor Jean-Louis Arcand, Thesis Director, and Professor Emmanuelle Auriol, from the University of Toulouse. Ms Covarrubias has studied how the economic and social constraints faced by poor households in three sub-Saharan African countries, Tanzania, Uganda and Lesotho, affect those households’ risk management strategies and production decisions.
What made you choose your research topic?
Since I worked for seven years in the UN system between finishing my Master and starting my PhD at the Graduate Institute, my dissertation research questions certainly emerged as a product of my experiences at the Food and Agriculture Organization (FAO) in combination with the learning gained from seminars and coursework within the Development Economics programme. Each essay has its own story.
In my first essay I analyse altruism within households in terms of the manner in which orphan and non-orphan children are sent to school or work. This topic emerged from fieldwork that I undertook for FAO and that made me aware of the issue of child-level inequalities borne out of the demographic changes induced by HIV-AIDS in sub-Saharan Africa. I was driven to understand – from an economic lens – the various mechanisms through which life circumstances and human behaviour lead some children to school and others into labour.
The topic for my second essay, which analyses the relationship between crop choice, gender and agricultural productivity, fed my interest in the implications of gender inequalities for household food security. For that work, I collaborated with the Centre for International Environmental Studies to explore whether the productivity of female producers could be improved by a low-entry barrier risk management strategy: diversity in crop portfolios. This essay was certainly inspired by the growing attention of the international community to the role of women in agriculture, and their importance for sustaining long-run global agricultural production needs.
Finally, the third essay was a by-product of the first two. The FAO granted me access to a new impact evaluation dataset from Lesotho – a country disproportionally affected by the HIV-AIDS crisis with an important share of orphaned and vulnerable children – that would enable me to test the impact of a social protection programme on household agricultural decisions and attitudes towards risk. In development economics, research based on randomised control trials (RCT) is the “gold standard” for establishing causal relationships. With access to this RCT data, I would be able to make use of an experimental methodology and validate my hypotheses regarding poor households’ aversion to risk in taking livelihoods decisions.
And what about your findings?
I can highlight several layers of results with respect to each essay and for the thesis as a whole. First, my research confirms that orphan children are more likely than non-orphans to participate in work activities rather than school. This outcome arises due to the budgetary and labour constraints their families face, and is magnified in rural areas. In other words, in order to make ends meet, poor rural households may undertake a detrimental risk management strategy in which a certain class of children does not necessarily receive the same schooling investments as others. This finding emerges despite the presence of a universal primary school education act in Tanzania.
At the same time, rural households are by no means a homogeneous group, and my research demonstrates that agricultural households do implement productive risk management strategies to ensure productivity outcomes. Land allocation and crop portfolios are adjusted strategically within rural households in Uganda according to household demographic structure, resource availability, and local agronomic and economic conditions. My second essay questions whether such decisions are really optimal. I prove in that analysis that female farmers can obtain more harvest per acre than male farmers by engaging in higher-value crop production. Whether that is possible for them in practice relies on social norms and expectations regarding how land is allocated within households, and the competing domestic responsibilities rural women face with respect to men.
In my third essay, I then confirm the general hypothesis of my research regarding the implications for households of being liquidity constrained. In my evaluation of the Lesotho Child Grants Programme (CGP), I verify that when rural households are endowed with more cash on hand, they make productive use of such cash, investing in their agricultural activities and diffusing it through their networks. Having more cash to spend serves multiple purposes. The first is that it encourages households to engage in productive agricultural strategies that would otherwise seem too risky because poor households tend to have limited means to buffer income and consumption shocks. The second is that by promoting new consumption and investments among recipients, a cash transfer contributes to stimulating local economic activity. Finally, it strengthens informal support networks since some resources tend to be shared among households in the same village.
Can you give us examples of the policy relevance of these findings?
The international development community utilises many tools to provide safety nets for poor households and support the sustainable development of their livelihoods. Among those tools are cash transfer programmes, which have typically been implemented in a “conditional” format whereby households receive regular cash so long as they fulfil certain tasks, such as sending children to school or taking them to health clinics for check-ups. My research builds on that knowledge, showing that “unconditional” (e.g. no strings attached) cash transfer programmes can also be an effective tool to improve household livelihoods.
By analysing the impacts of an unconditional cash transfer programme on household risk in livelihood strategies and demonstrating that even households who are not recipients of the transfer are affected by its operations, I provide new evidence regarding the unintended consequences of public interventions. This evidence is useful in two ways. First, by showing that an unconditional cash transfer programme is capable of promoting changes in productive strategies, I contribute towards dispelling the belief that handouts create dependency. Furthermore, the fact that a non-agricultural intervention generated agricultural outcomes is equally important since it provides a basis for pairing cash with complementary interventions that could help further magnify impacts.
If taken into consideration with my findings regarding the productivity gains female farmers can obtain if endowed with more, or better allocated, resources, these findings also lend support to the targeting of women by interventions of this kind. With respect to my first essay on orphan child schooling investments, if we consider that the families receiving the CGP in Lesotho are very likely to house orphan and non-orphan children, given that the prevalence of HIV-AIDS in the country stands at 25 percent, the value of directing cash transfers to households with children is underscored. A cash transfer of this sort could reduce the economic burden of demographic composition that challenges the ability of households to take livelihoods-enhancing decisions.
What are you going to do now?
With my dissertation defended, I am excited to remain engaged with the Graduate Institute’s Gender Centre by contributing as a postdoc researcher to DEMETER, a multidisciplinary research programme on the gendered livelihoods implications of large-scale land commercialisation in Cambodia and Ghana. A household livelihoods survey has just been completed in Cambodia, and I will be applying my economist’s perspective on intra-household gender inequalities, livelihoods decisions and food security to the analysis of that survey. In the medium-long term, I expect to maintain linkages between the academic and international sector in order to engage in evidence-based, policy relevant research, as I sought to do within my doctoral work.
How will you remember your doctoral experience?
I will certainly remember my PhD years in a positive light. It was an unprecedented experience to fully engage in my own research agenda, applying my “real world” experiences and growing in my capacities as an economist, theoretically and analytically. The environment at the Graduate Institute was dynamic and intellectually rewarding. It also revealed itself to be professional, receptive and supportive in promoting a work-life balance, something I discovered after having given birth at the end of my second year. Overall, this was an unforgettable period and I have certainly emerged better equipped to re-engage with the professional world in my postdoctoral life.
Full citation of the thesis: Covarrubias, Katia. “Household Inequalities, Economic Constraints and Decision-Making Processes: Three Essays in Development Economics”. PhD thesis, Graduate Institute of International and Development Studies, 2016.
Illustration: Transporting harvest output. Semonkong community council, Maseru District, Lesotho. Photo by Katia Covarrubias.