RDRS Bangladesh paid $8.50 to unstick a labor market

In the Rangpur region of northern Bangladesh, landless rice-farming households face 'Monga', an annual pre-harvest lean season when the previous harvest's food and cash have run out but the next one hasn't come in yet, and paid agricultural work is scarce locally at that exact time. Seasonal work is available elsewhere in the country during that same window, and a temporary move to take it would let a household earn through the gap — but researchers found most eligible households still didn't migrate for it, even though the potential earnings were well above the cost of getting there.

The instinctive fix was to assume households needed more information about the opportunity, or more encouragement to take a risk they were too cautious about — but a randomized study found the real constraint was narrower and more mechanical: households didn't have the roughly $8.50 of spare cash a bus fare and a few days' food required to get to the work at all, precisely because that cash didn't exist until after the harvest they were trying to survive until.

Gave a one-time $8.50 grant conditional on migrating, covering only the bus fare that blocked the decision; many kept migrating after it stopped.

The payment was sized to cover only the real cost of getting to work, not a general income boost.

Conditioning on migration ensured the money was used for the intended purpose.

Because migration was genuinely profitable, many continued after the subsidy stopped.

The intervention targeted the specific constraint, making it cheap and effective.

When people skip a profitable opportunity, check for a small fixed cost blocking access before assuming they need information or a bigger incentive.

The $8.50 incentive raised migration 22 points and lean-season consumption 8-10%, with many still migrating years after it ended. The result, published in Econometrica in 2014, became a landmark case in development economics for 'underinvestment in a profitable technology' — showing that removing one small, specific liquidity constraint could unlock a labor-market decision worth far more than the subsidy itself — and the program scaled into Evidence Action's 'No Lean Season' initiative, which GiveWell named a recommended top charity based on this evidence.