Visiting Speaker: Chris Udry, Northwestern University
Presentation Title: The Limits of Capital:Grant and Loan Experiments with a Graduation Program in Uganda - Joint with Lasse Brune, Kim Fe Cramer, Natalia Seimel and Dean Karlan.
Abstract:
Low income, rural households in developing countries face profound
frictions across multiple markets.
Among these, many models of persistent poverty center on capital
constraints generated by imperfect
borrowing markets and barriers to saving.To study the shape of capital
returns, we randomly
vary the size of lump-sum grants on top of a graduation program in rural
Uganda. To test the hypothesis that there is predictable
heterogeneity in the returns to grants, some households receive their
grant via a community-managed group loan fund. Capital constraints
undoubtedly are important and we find evidence for them (yet again).
There is also evidence of heterogeneity in grnat returns that is
predictable by borrowing from group loan fund. We also find that
uninsured risk plays an important role in limiting the response of
investment to grants,
Host : Heitor Pellegrina & Santosh Gautam