Asset Accumulation and Savings Persistence
Meta-AnalysisReview
Short-term public works programs frequently fail to generate lasting employment or wage gains after program completion. Policymakers require mechanisms that convert temporary cash inflows during active participation into enduring financial security for low-income households.
Picture this
Think of a short-term public works program like a heavy rainstorm over a dry farm. If a farmer lets the water run off, the soil dries up as soon as the storm ends. But if the farmer channels the rainfall into a water storage tank or buys farming tools, the benefits of that single storm continue to support the farm for years after the rain stops.
What the evidence says
Participants increased savings or asset ownership in 9 out of 10 evaluations examining asset accumulation; in Tunisia, participants retained significantly higher home, livestock, and furniture ownership 5 years post-program despite a 5 percentage point drop in employment probability.
- Who was studied
- Review of 13 randomized evaluations covering thousands of low- and middle-income participants in Tunisia, Côte d'Ivoire, Sierra Leone, DRC, and Comoros.
- How
- Systematic review of randomized controlled trials tracking employment, earnings, savings, and physical asset ownership over short-term to 5-year post-program periods.
What to do
Pair temporary public works wage payouts with incentivized formal savings accounts to ensure short-term earnings are converted into durable household assets.
From the source
"Participants in PWPs increased their savings or assets compared to nonparticipants in nine of ten studies that examined savings or asset accumulation, measured at least several months after program completion. The extra income gained during the PWP allowed participants to have more savings or assets in the medium and long term."
Public works programs and labor market outcomes.pdf