Impact Evaluation of the COVID-19 Emergency Cash Transfers in Peru

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The objective of this Technical Cooperation (TC) is to support the Peruvian Government in monitoring and evaluating the measures the authorities have implemented to counteract the COVID-19 pandemic's negative effects on the welfare of poor and vulnerable households. This TC will fund the impact evaluation of a large-scale public program that is delivering unconditional emergency cash transfers to almost 7 million poor and vulnerable households in Peru. The outputs produced by this TC will provide the Ministry of Finance in Peru with estimates of the effects of the cash grants on consumption, labor market participation, physical and mental health, mortality, domestic violence, human capital investment, and intrahousehold dynamics, as well as access to credit and default patterns. This TC will provide the Peruvian government with timely evidence that will enable them to improve their current policies aimed at supporting minimum consumption levels of poor and vulnerable people in the face of the crisis caused by COVID-19 and future emergencies.Governments around the globe have imposed mandatory quarantines to contain the expansion of the COVID-19 pandemic. While these measures help to flatten the curve of contagion, they have triggered serious and unevenly spread economic consequences, particularly in a region, such as Latin America, with a large informal sector.In Peru, the first country in Latin America and the Caribbean to introduce a compulsory shelter-in-place order, the government sought to smooth the impact of the shock on the consumption of vulnerable households by providing a series of emergency cash transfers, a policy adopted by over 100 countries across the globe. Since the pandemic began, the Peruvian government has given unconditional emergency cash transfers to almost 80% of the most vulnerable households in the country. To date, about 8 million households have received PEN 1520. This transfer is substantial, equivalent to twice the cost of the food basket used in the country to determine extreme poverty status for a family of four.The transfers initially targeted poor and extremely poor households, but it was later extended to cover vulnerable households. After the announcement of the initial round of transfers early on during the pandemic, the government instituted a second round in October 2020. Given the emergence of a second wave and the delay in vaccination plans due to the country's political crisis, the Peruvian government announced a third round of transfers at the beginning of 2021 and mandated a second stay-at-home order during February.