One of the best ways to aid populations in financial need is using stipends. Niger, the Philippines and Kenya are three countries working to set an example of how stipends can reduce poverty and improve people’s financial status and general well-being.
The government of Niger has been giving money to those with the most economic need since 2012 and has seen the program change lives. Since the 1990s, researchers have tried to find the most effective way to relieve poverty for those in developing nations. Researchers conducted trials in Niger in which some participants received aid and others did not. The researchers gave benefactors different types of aid in the form of subsidizing materials or direct funds. Through the study, researchers found that stipends can reduce poverty. In the years after the 2012 program, approximately 100,000 households have been given 24 monthly payments of about $16. This money “more than doubled [the citizens’] typical spending power.”
In the Philippines, the government started a program in 2008 called the Pantawid Pamilyang Pilipino Program, or 4Ps. Only certain groups are eligible for the stipends, but in 2019, more than 4 million households benefited. One of the requirements of the program is that the beneficiary household’s children must be enrolled in school and attend school 85% of the time. The stipends can reduce poverty, but these educational requirements help individuals as well. Although families can only be eligible for the program for seven years, many see it as extremely helpful in the Philippines.
Kenya implemented a program similar to the stipend program in Niger and saw visible success. There is often a fear that when people in poverty receive stipends, they will choose not to work or use the increased income to purchase vices like alcohol instead of necessities. The research that occurred in Kenya showed that stipends gave citizens more free time. From 2011 to 2013, groups of 250 people received about $400 in one payment or through nine equal allotments. Economists found that those who had the payment upfront typically used it for durable goods and the smaller payments often went toward food. The economic activity and overall well-being of both groups increased.
Moreover, research that occurred from 2011 to 2013 found that when more than 10,500 households received $1,000 stipends across 653 randomized villages, the economic benefits helped everyone, including those who did not receive the stipend. This research is limited in scale but shows that stipends can also indirectly reduce poverty.
Overall, the economic value of stipends has been very successful. The examples of Niger, the Philippines and Kenya show how the simple concept of stipends opens up the possibility for a better future. Because stipends can reduce poverty, countries can expand these programs through further research and extend accessibility so more people receive benefits. In the Philippines, families are limited to receiving cash transfers for seven years and it can be hard to qualify. In Kenya, research needs to keep happening on larger scales to show the multitude of benefits. Ultimately, these three examples show the success of stipends in helping those struggling amid poverty.