Source: Asia Development Bank
Concerns with eligibility criteria
Some of these relate to the inclusion of households not facing economic hardship and the exclusion of families living in poverty. There’s a need to refine the current criteria to better identify households experiencing temporary financial difficulties, even if they own certain assets.
Challenges in data verification
Another area for improvement in Aswesuma is the difficulty officials face in verifying household information related to eligibility. For example, errors may occur during data collection if households withhold accurate information about their poverty status to qualify for benefits or are unable to recall details correctly. These inaccuracies can reduce the program’s effectiveness by excluding people who genuinely need help and undermining efforts to create a more objective social protection system.
Improving follow-up and monitoring
Better data collection methods during follow-ups with Aswesuma recipients would help improve the criteria. This would allow the program to monitor households’ economic conditions and track improvements resulting from cash transfers. The main goal of these transfers is to help participants move out of poverty by improving their living situations. Therefore, follow-up assessments should document any changes and measurable outcomes related to food insecurity or poverty levels. These outcomes should go beyond the current Aswesuma indicators to better reflect improvements in well-being.
Addressing chronic and transient poverty
Ongoing updates to Aswesuma should also improve its ability to target people experiencing both chronic and transient poverty. Chronic poverty refers to long-term deprivation, often passed down through generations, while transient poverty involves short-term income or spending losses, even when long-term resources are sufficient to stay above the poverty line (Duclos et al., 2078). The current deprivation score mainly focuses on chronic poverty, emphasizing household assets and housing conditions (13 of the 22 indicators are based on multidimensional measurements).
Gaps in coverage and food insecurity
While addressing chronic poverty is important, it’s also necessary to consider temporary poverty. A large portion of the population (households ineligible for Aswesuma but who experienced food insecurity in the past 12 months) remains underserved. Of the 20% of the population that faced food insecurity, nearly 40% are not eligible for Aswesuma.
Expanding the framework for vulnerability
Given the current economic climate, with rising costs and income losses, measures of temporary poverty could help identify both long-term and short-term hardship, regardless of assets or housing. Including data on household members’ recent employment experiences, especially job loss, could offer a more complete picture of who needs support. The amount of cash transferred is unlikely to directly improve indicators related to household assets or other long-term poverty markers, as those require larger investments in education, health, and infrastructure (Lipton and Ravallion, 1995).
Climate vulnerability and regional differences
Climate vulnerability also adds complexity to household conditions. Although it’s difficult to measure, including it would help the program reach more at-risk groups in Sri Lanka.
The current set of indicators can also be improved by accounting for both visible and hidden factors that influence household selection. The relevance of indicators varies by region and demographics. For example, vehicle use and electricity consumption depend on the availability of alternatives, which differ across the country. Rural households may lack access to transportation or electricity not because of poverty, but because those services aren’t available. Regional adjustments in how deprivation is measured could lead to more accurate assessments of poverty in both rural and urban areas.
Asset ownership and agricultural work
Asset indicators like ownership of agricultural machinery or land are influenced by both observable and hidden factors, including the decision to work in agriculture. This suggests a need for additional support programs, such as insurance for agricultural workers. In some areas, deprivation in agriculture-related indicators may actually reflect higher well-being, depending on location and market access.
Labor market impacts and conditional transfers
Finally, the program’s impact on labor market outcomes should be considered. The study predicts a drop in labor force participation for both men and women under various scenarios. This aligns with economic theory, which suggests that higher non-labor income reduces the need for paid work (Garganta et al., 2017). However, building resilience through employment is key to long-term poverty reduction. In some cases, transfers tied to employment have shown fewer negative, or even positive, effects on labor participation (Berlinski et al., 2024). While cash transfers are helpful for addressing food insecurity, exploring conditional transfers that encourage work and self-reliance is important for helping people move out of poverty.