Building resilience during the pandemic: evidence from a cash transfer program in Bolivia

Exploiting the context of a large-scale, untargeted, non- contributory pension program in bolivia, we study the short-term effects of cash transfers on household resilience during the onset of the Covid-19 pandemic. We compare households that became eligible during the early stages of the pandemic to marginally ineligible households using a regression discontinuity design. We utilize a novel dataset collecting information in near-real time to unravel a 25% increase in the probability that households have enough food to cover a week of necessities, and a 50% decline in the probability of going hungry due to lack of food during the first month of the pandemic. We find that the program acts as insurance for households that lost their livelihood during the pandemic. This insurance feature explains 60% of the reduction in the probability of going hungry. The results suggest that pre-existing untargeted cash transfer programs in developing countries could be effective both at assisting poor households in meeting their consumption needs and at providing insurance in case of labor market shocks to non-poor households.