The Impact of Emergency Cash Assistance During the COVID-19 Pandemic in Colombia

Cash assistance in emergency settings has been shown to assist recipients in mitigating resulting economic fallout, for example through increased food security. The VAT Compensation, a new unconditional cash transfer in Colombia, assists 1 million low-income households in navigating the economic crisis as a result of the COVID-19 pandemic. Researchers conducted a randomized evaluation to measure the effects of the transfer on recipients’ physical and mental health, food access and security, financial security, parental investment in their children’s education, political attitudes, and other outcomes. The transfer had positive (albeit modest) impacts on household well-being in financial health and food access. Moreover, the transfer increased support for emergency assistance to households and firms during the crisis and promoted social cooperation. The study also engaged in qualitative interviews with recipients to explore bottlenecks from rapid mobile money expansion during the pandemic.