Coping with Risk: Negative Shocks, Transactional Sex, and the Limitations of Conditional Cash Transfers

Abstract Transactional sex is an important risk-coping mechanism and a leading contributor to the HIV/AIDS epidemic in sub-Saharan Africa. We use data from a conditional cash transfer (CCT) experiment in rural Tanzania designed to incentivize safer sexual behavior by conditioning transfers on testing negative for sexually transmitted infections (STIs). For women, we find that negative shocks measured by food insecurity lead to a 36% increase in STIs and increases in self-reported risky sexual behavior. We find no significant effects of negative shocks on either STIs or self-reported sexual behavior for men. This CCT design did not appear to mitigate the behavioral response to shocks that we document in women. We propose that this finding can be explained by binding credit constraints and the relatively infrequent timing of the CCTs. When women experience a negative shock, cash needs are immediate, while transfers linked to a CCT are paid out in a specific point in time. If women are unable to access credit during a shock, they may resort to transactional sex even if they face monetary incentives to do otherwise.