How Effective are Cash Transfers in Mitigating Shocks for Vulnerable Children? Evidence on the Impact of the Lesotho Child Grant Programme on Multidimensional Deprivation

Shocks can pressure families into negative coping strategies with significant drawbacks for children’s lives and development, particularly for children living in disadvantaged households who are at greater risk of falling into a poverty trap. This paper investigates if unconditional cash transfers can be effective in protecting children against unexpected negative life events. Using two waves of data, we found that the Lesotho Child Grant Programme reduced the incidence and intensity of multidimensional deprivation for children living in labour-constrained female-headed households that experienced negative economic or demographic shocks. Programme design in shock-prone contexts should seek to reinforce and widen the protective effect of the cash transfer for the most vulnerable.