Resources, stimulation, and cognition: How transfer programs and preschool shape cognitive development in Uganda

Recent evidence shows that early childhood is a critical period for investments in human capital and that micronutrient deficiency and inadequate stimulation are major causes of impaired child development in poor countries. Transfers to households linked to preschool participation may improve cognitive and noncognitive development in early childhood, but there is limited evidence, all of it from Latin America. Using a randomized controlled trial design in Karamoja, Uganda, we examine the impacts of two transfer modalities – cash transfers or multiple-micronutrient-fortified food transfers – linked to preschool enrollment on child cognitive and noncognitive development. We find that food transfers have no significant impacts, but cash transfers cause significant increases in cognitive measures, by about 9 percentage points relative to the control group. We also explore mechanisms and find plausible evidence for cognitive impacts of cash through both a nutrition pathway (cash improves diet quality leading to reduction in anemia, implying improved cognition) and a stimulation pathway (cash increases contributions to preschool teachers leading to improved preschool capacity and higher child preschool attendance, implying higher quantity and quality of exposure to stimulation). We find that food has no significant impacts on these intermediate outcomes and consider which contextual factors may lead to its limited effects relative to cash. We also find indications that the food and cash treatments may have different distributional impacts. Results suggest that although the food treatment has no average impacts, it favors children with initially higher cognitive development, potentially causing slight increases in inequality among treated children. Meanwhile the cash treatment, which does have significant impacts on average, favors children with initially lower cognitive development, potentially reducing inequality among treated children.