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Cash transfers and childhood poverty in
developing countries
Armando Barrientos
IDPM and CPRC
The University of Manchester
[email protected]
Cash transfers and childhood poverty
• Cash transfers are ‘underused’ in developing
countries as a means of achieving poverty reduction
and prevention goals
• Cash transfers to poor households are effective in
reducing poverty because cash can be used to address
a range of deficits
• Conditional cash transfers programmes focused on
children, such as PROGRESA/OPORTUNIDADES in
Mexico, can successfully support household
consumption and investment
Cash transfers versus in-kind subsidies
North America
East and Central Europe
Western Europe
Middle East and North
Africa
transfers to organisations and households
South Asia
health and education
Latin America and the
Caribbean
East Asia and the Pacific
Sub-Saharan Africa
0
2
4
6
8
10
12
14
16
Public transfers and public expenditure on health and education as a % of GDP (1972-1997)
Cash transfers and childhood poverty:
Mexico’s Progresa/Oportunidades
• PROGRESA [Programme for Education, Health and Nutrition]
was initiated by the Government of Mexico in 1997 with the aim
of breaking the cycle of poverty among rural households
• Targeted conditional cash transfer programme:
– Combines demand and supply side interventions: cash transfers to
poor households with children: supporting household
consumption, and child transfers tailored on school grade and sex;
food supplements for infants undernourished; institutional and
financial support for education and health providers.
– Conditional on children attending school, and all household
members accessing primary health care
– Cash transfers paid to the mother
– Decentralised administration
• By 2002 PROGRESA reached 40% of rural households in Mexico
at a cost of 0.3% of GDP was extended to urban areas and
renamed OPORTUNIDADES
PROGRESA health outcomes
• Evaluation based on difference-in-difference approach (change
over time in treatment group minus change over time of control
group)
• Health:
– Low incidence of utilisation of health care by the poor in rural
Mexico: on average 0.65 visits per year – rising by between 30-50%
two years after the programme started
– Infants aged 0-2 had 12% lower incidence of reported illness; and
11% for 3-5 year olds
– 19% fewer days experiencing difficulty due to illness for 18-50 year
olds
– 17% fewer days incapacitated among over 50s
PROGRESA education outcomes
• Rise in secondary school enrolment rates:
1997
1998
1999
Boys
65.3
+8.5
+5.7
Girls
52.8
+12.6
+13.2
• Ensuring additional years of education for each child
Conditional cash transfer programmes in
other developing countries
• Conditional cash transfer programme have been introduced in
other countries:
–
–
–
–
–
–
Bangladesh’s Food/Cash for Education,
Brazil’s PETI and Bolsa Escola
Honduras’s Programa de Asignación Familiar
Nicaragua’s Red de Protección Social
Colombia’s Familias en Acción
Jamaica’s Programme of Advancement through Health and
Education
– Mozambique’s Minimum Income for School Attendance
• And there are examples of unconditional cash transfer
programmes focused on children too:
– South Africa’s Child Support Grant
Some general issues relating to cash
transfers in developing countries
• barriers to the increasing use of cash transfers in developing
countries are mainly to do with political economy, rather than
technical, factors
• cash transfers can can facilitate protection and promotion,
consumption and investment
• cash transfers work best when combined with in kind subsidies
and rights
• households are key to effective cash transfer programmes
Further information
– Non-contributory pensions and poverty prevention. A comparative study of
Brazil and South Africa [2003], Report, Manchester: IDPM and HelpAge
International. http://idpm.man.ac.uk/ncpps/
– Child Poverty and Cash Transfers [2004], Report 4, London: Childhood
Poverty Research and Policy Centre and Save the Children Fund.
http://www.childhoodpoverty.org/
– Social Assistance in Low Income Countries Database [2005] available from
www.chronicpoverty.org