A cash transfer programme in Ghana has reduced child labour in cocoa-growing households and helped them to cope during difficult times, according to recent research from the International Cocoa Initiative.  

The study is the first of its kind to measure the impact of a cash transfer programme for cocoa farmers on child labour. The randomized experiment involved over 600 families in Ghana’s Brong-Ahafo and Eastern regions, who received cash transfers for six months. It examined the effects of the cash transfer of around $30 per month on both households and children.

The project was funded in part by an innovation grant from the Swiss Secretariat for Economic Affairs (SECO) in the scope of the Swiss Platform for Sustainable Cocoa (SWISSCO).

Increased ability to cope during difficult times

The research shows that the cash transfers made households more resilient to unexpected adverse events.

Two thirds of the households involved in the study experienced illness, a death in the family, a poor harvest, or another type of shock, which negatively affected their financial situation. The results show that families who received the cash transfers were better able to cope with these unexpected events. Households not receiving the cash transfer were significantly more likely to resort to negative coping strategies, such as reducing the family’s food consumption or using child labour.

Yaw Donkor, a farmer from Sankore, was one of the recipients of the cash transfer programme. His story is a good example of the consequences of a sudden illness. “I was seriously sick” explained Yaw, who could not work for several months. “I had some issues with my eyes…if not for the money I have no idea how my children and I would have survived that period.”

Reductions in child labour

The cash transfers reduced child labour by 9 percentage points – this corresponds to a 20% decrease from a prevalence rate of 58% in the sample.

The study also showed that the cash transfers had a positive impact on children’s material wellbeing, with children in households receiving the transfers more likely to own essential items such as blankets, shoes and clothes.

“The results of this study are very encouraging. Regular cash transfers have helped to protect children during a difficult period when many families were struggling to make ends meet. During the six month pilot, child labour significantly reduced. These results demonstrate the important role of income in tackling child labour, but also that it cannot solve the issue alone – even after the programme, child labour prevalence remained relatively high at around 50%. Income support needs to be one part of a broader set of measures to prevent and address child labour.” explained Matthias Lange, ICI’s Executive Director.  

Support at a particularly difficult time

The study occurred during the Covid pandemic, which posed additional difficulties for most households. Farmers reported a drop in earnings from small business activities, obstacles to reaching markets and challenges finding affordable adult labour. At times of heightened vulnerability such as this, social protection systems are vital.

“Cash transfers are a form of social protection that have been shown to result in positive outcomes for children and families. During times of heightened vulnerability, such as during the pandemic, they are especially important to protect households from resorting to negative coping strategies like child labour” explained Megan Passey, Head of Knowledge and Learning at ICI. “During the design of the project, we consulted with experts from LEAP – Ghana’s national cash transfer program, who provided valuable feedback on the design of the project” she added.

Avoiding unintended negative consequences

There is growing body of evidence to show that cash transfers generally have positive impacts on child wellbeing, but careful design is important to avoid adverse effects. Other studies show that in a small number of cases, cash transfers can cause child labour to increase, particularly when the money was used to set up new business activities that increased the need for labour.

This pilot delivered cash transfers in regular monthly payments, rather than as a lumpsum to encourage investment in everyday needs. The programme also included awareness raising on the dangers of child labour and the importance of investing in children’s wellbeing. Further research is needed to better understand the impact of other design considerations, such as the size of the transfer, the timing and who receives it. It will also be important to investigate the longer-term effects.

Programme design

More than 600 cocoa-growing households in two farmer societies in Ghana were randomly assigned to a study group or a control group. Before the study began, a baseline survey was conducted. Households in the study group received monthly cash payments over a 6-month period via mobile money. These were adjusted for the number of children in the household and capped at GHS 228 ($35) per month. A second survey of all households was then conducted to measure the impact. After this, households in the control group also received six monthly payments of the same value, minimizing any negative impacts related to fairness and community cohesion.

This impact study was conducted as part of an innovation project funded in part by the Swiss State Secretariat for Economic Affairs (SECO) in the scope of the Swiss Platform for Sustainable Cocoa (SWISSCO). ICI implemented the cash transfer programme, in partnership with ECOM.  

Read the full study.