We present the results of three large-scale randomized controlled trials (RCTs) carried out in Chicago, testing interventions to reduce crime and dropout by changing the decision making of economically disadvantaged youth. We study a program called Becoming a Man (BAM), developed by the nonprofit Youth Guidance, in two RCTs implemented in 2009-2010 and 2013-2015. In the two studies participation in the program reduced total arrests during the intervention period by 28-35%, reduced violent-crime arrests by 45-50%, improved school engagement, and in the first study where we have follow-up data, increased graduation rates by 12-19%. The third RCT tested a program with partially overlapping components carried out in the Cook County Juvenile Temporary Detention Center (JTDC), which reduced readmission rates to the facility by 21%. These large behavioral responses combined with modest program costs imply benefit-cost ratios for these interventions from 5-to-1 up to 30-to-1 or more. Our data on mechanisms are not ideal, but we find no positive evidence that these effects are due to changes in emotional intelligence or social skills, self-control or "grit," or a generic mentoring effect. We find suggestive support for the hypothesis that the programs work by helping youth slow down and reflect on whether their automatic thoughts and behaviors are well suited to the situation they are in, or whether the situation could be construed differently. JEL Codes: C91, C93, D03, D1, I24, I3, I32, K42.
We use a randomized controlled trial to study the response of poor households in rural Kenya to unconditional cash transfers from the NGO GiveDirectly. The transfers differ from other programs in that they are explicitly unconditional, large, and concentrated in time. We randomized at both the village and household levels; furthermore, within the treatment group, we randomized recipient gender (wife versus husband), transfer timing (lump-sum transfer versus monthly installments), and transfer magnitude (US$404 PPP versus US$1,525 PPP). We find a strong consumption response to transfers, with an increase in household monthly consumption from $158 PPP to $193 PPP nine months after the transfer began. Transfer recipients experience large increases in psychological well-being. We find no overall effect on levels of the stress hormone cortisol, although there are differences across some subgroups. Monthly transfers are more likely than lump-sum transfers to improve food security, whereas lump-sum transfers are more likely to be spent on durables, suggesting that households face savings and credit constraints. Together, these results suggest that unconditional cash transfers have significant impacts on economic outcomes and psychological well-being.
Does the lack of wealth constrain parents' investments in the human capital of their descendants? We conduct a nearly fifty-year followup of an episode in which such constraints would have been plausibly relaxed by a random allocation of substantial wealth to families. We track descendants of participants in Georgia's Cherokee Land Lottery of 1832, in which nearly every adult white male in Georgia took part. Winners received close to the median level of wealth - a large financial windfall orthogonal to participants' underlying characteristics that might have also affected their children's human capital. Although winners had slightly more children than non-winners, they did not send them to school more. Sons of winners have no better adult outcomes (wealth, income, literacy) than the sons of non-winners, and winners' grandchildren do not have higher literacy or school attendance than non-winners' grandchildren. This suggests only a limited role for family financial resources in the formation of human capital in the next generations in this environment and a potentially more important role for other factors that persist through family lines.