Conditional Cash Transfers and the Equity-Efficiency Debate

During the past decade, the use of conditional cash transfers to increase investment in human capital has generated considerable excitement in both research and policy forums. Such schemes are being increasingly adopted in a number of contexts and...

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Main Authors:	Das, Jishnu, Do, Quy-Toan, Özler, Berk
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, D.C. 2013
Subjects:	CASH TRANSFERS EQUITY HUMAN CAPITAL HEALTH EDUCATION CHILD LABOR POVERTY MITIGATION WORK GROUPS CONSUMPTION ECONOMICS FUNGIBILITY PARTICIPATION HOUSEHOLD BEHAVIORS CONDITIONAL CASH TRANSFERS
Online Access:	http://documents.worldbank.org/curated/en/2004/04/3573068/conditional-cash-transfers-equity-efficiency-debate http://hdl.handle.net/10986/14299

id	okr-10986-14299
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spelling	okr-10986-142992021-04-23T14:03:20Z Conditional Cash Transfers and the Equity-Efficiency Debate Das, Jishnu Do, Quy-Toan Özler, Berk CASH TRANSFERS EQUITY HUMAN CAPITAL HEALTH EDUCATION CHILD LABOR POVERTY MITIGATION WORK GROUPS CONSUMPTION ECONOMICS FUNGIBILITY PARTICIPATION HOUSEHOLD BEHAVIORS CONDITIONAL CASH TRANSFERS During the past decade, the use of conditional cash transfers to increase investment in human capital has generated considerable excitement in both research and policy forums. Such schemes are being increasingly adopted in a number of contexts and countries to improve outcomes in health, education, and child labor as they aim to balance the goals of current and future poverty reduction. In this paper, the authors define any scheme requiring a specified course of action in order to receive a benefit as a conditional cash transfer. This definition includes cash transfers based on human capital investments, but is sufficiently broad to encompass other schemes such as work-fare programs or consumption transfers. The authors examine the rationales behind, the problems with, and the tradeoffs inherent to conditional cash transfer programs. They discuss two main concerns: low participation and fungibility. Low participation refers to the problem of program uptake. If individuals do not participate in the program, whether it was designed to increase human capital investment or to target resources, the program will not be successful. The problem of fungibility, however, depends on the rationale for the particular conditional cash transfer program. When used to increase efficiency, even when program uptake is high, program effects may be less than envisioned due to behavioral responses of households that lead to changes in the consumption of close substitutes. While researchers have typically addressed these issues separately, the authors emphasize the need for policymakers to incorporate a number of different factors in a comprehensive framework to design optimal conditional cash transfer schemes. 2013-07-01T15:23:49Z 2013-07-01T15:23:49Z 2004-04 http://documents.worldbank.org/curated/en/2004/04/3573068/conditional-cash-transfers-equity-efficiency-debate http://hdl.handle.net/10986/14299 English en_US Policy Research Working Paper;No.3280 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	CASH TRANSFERS EQUITY HUMAN CAPITAL HEALTH EDUCATION CHILD LABOR POVERTY MITIGATION WORK GROUPS CONSUMPTION ECONOMICS FUNGIBILITY PARTICIPATION HOUSEHOLD BEHAVIORS CONDITIONAL CASH TRANSFERS
spellingShingle	CASH TRANSFERS EQUITY HUMAN CAPITAL HEALTH EDUCATION CHILD LABOR POVERTY MITIGATION WORK GROUPS CONSUMPTION ECONOMICS FUNGIBILITY PARTICIPATION HOUSEHOLD BEHAVIORS CONDITIONAL CASH TRANSFERS Das, Jishnu Do, Quy-Toan Özler, Berk Conditional Cash Transfers and the Equity-Efficiency Debate
relation	Policy Research Working Paper;No.3280
description	During the past decade, the use of conditional cash transfers to increase investment in human capital has generated considerable excitement in both research and policy forums. Such schemes are being increasingly adopted in a number of contexts and countries to improve outcomes in health, education, and child labor as they aim to balance the goals of current and future poverty reduction. In this paper, the authors define any scheme requiring a specified course of action in order to receive a benefit as a conditional cash transfer. This definition includes cash transfers based on human capital investments, but is sufficiently broad to encompass other schemes such as work-fare programs or consumption transfers. The authors examine the rationales behind, the problems with, and the tradeoffs inherent to conditional cash transfer programs. They discuss two main concerns: low participation and fungibility. Low participation refers to the problem of program uptake. If individuals do not participate in the program, whether it was designed to increase human capital investment or to target resources, the program will not be successful. The problem of fungibility, however, depends on the rationale for the particular conditional cash transfer program. When used to increase efficiency, even when program uptake is high, program effects may be less than envisioned due to behavioral responses of households that lead to changes in the consumption of close substitutes. While researchers have typically addressed these issues separately, the authors emphasize the need for policymakers to incorporate a number of different factors in a comprehensive framework to design optimal conditional cash transfer schemes.
format	Publications & Research :: Policy Research Working Paper
author	Das, Jishnu Do, Quy-Toan Özler, Berk
author_facet	Das, Jishnu Do, Quy-Toan Özler, Berk
author_sort	Das, Jishnu
title	Conditional Cash Transfers and the Equity-Efficiency Debate
title_short	Conditional Cash Transfers and the Equity-Efficiency Debate
title_full	Conditional Cash Transfers and the Equity-Efficiency Debate
title_fullStr	Conditional Cash Transfers and the Equity-Efficiency Debate
title_full_unstemmed	Conditional Cash Transfers and the Equity-Efficiency Debate
title_sort	conditional cash transfers and the equity-efficiency debate
publisher	World Bank, Washington, D.C.
publishDate	2013
url	http://documents.worldbank.org/curated/en/2004/04/3573068/conditional-cash-transfers-equity-efficiency-debate http://hdl.handle.net/10986/14299
_version_	1764430171650129920

Conditional Cash Transfers and the Equity-Efficiency Debate

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