Conditionality as Targeting? : Participation and Distributional Effects of Conditional Cash Transfers
Conditional cash transfer programs, whereby transfers to households are conditional on school attendance or health checkups, have become a widespread policy tool. They are viewed as a means of immediate poverty alleviation through the cash payments...
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/612891484142967946/Conditionality-as-targeting-participation-and-distributional-effects-of-conditional-cash-transfers http://hdl.handle.net/10986/25949 |
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okr-10986-259492021-06-08T14:42:47Z Conditionality as Targeting? : Participation and Distributional Effects of Conditional Cash Transfers Rodriguez-Castelan, Carlos cash transfers social assistance poverty targeting welfare program design distributional effects conditionality Conditional cash transfer programs, whereby transfers to households are conditional on school attendance or health checkups, have become a widespread policy tool. They are viewed as a means of immediate poverty alleviation through the cash payments, and as a foundation of long-term poverty reduction through the emphasis on human capital formation. Because targeted transfers are usually conditioned on the consumption of normal goods, richer eligible households are more likely to consume more educational and health care opportunities than poorer ones. Thus, the eligible poorest households may benefit least from conditional cash transfers even to the extent that they may not participate at all. If conditionality is conceptualized as a cost at the margin, it may be leading poor households to opt out. This paper proposes a framework to model household decision making on participation (or not) in cash transfer programs depending on whether a conditionality exists. The paper outlines the optimal size of the cash transfer such that a fixed government budget maximizes the poverty reduction. The paper also shows that unconditional cash transfers may be preferable over conditional cash transfers if a government has a sufficiently high degree of poverty aversion, that is, if, beyond the poverty headcount, the government cares about how poor the poor are or the distance of the poorest among the poor below the poverty line. This basic argument carries over from income poverty to education poverty. The framework can be useful in shaping the recent discussion on the merits of universal benefits over conditional transfers in reducing poverty. 2017-01-30T17:48:44Z 2017-01-30T17:48:44Z 2017-01 Working Paper http://documents.worldbank.org/curated/en/612891484142967946/Conditionality-as-targeting-participation-and-distributional-effects-of-conditional-cash-transfers http://hdl.handle.net/10986/25949 English en_US Policy Research working paper,no. WPS 7940; Policy Research Working Paper;No. 7940 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean |
| 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 social assistance poverty targeting welfare program design distributional effects conditionality |
| spellingShingle |
cash transfers social assistance poverty targeting welfare program design distributional effects conditionality Rodriguez-Castelan, Carlos Conditionality as Targeting? : Participation and Distributional Effects of Conditional Cash Transfers |
| geographic_facet |
Latin America & Caribbean |
| relation |
Policy Research working paper,no. WPS 7940; |
| description |
Conditional cash transfer programs,
whereby transfers to households are conditional on school
attendance or health checkups, have become a widespread
policy tool. They are viewed as a means of immediate poverty
alleviation through the cash payments, and as a foundation
of long-term poverty reduction through the emphasis on human
capital formation. Because targeted transfers are usually
conditioned on the consumption of normal goods, richer
eligible households are more likely to consume more
educational and health care opportunities than poorer ones.
Thus, the eligible poorest households may benefit least from
conditional cash transfers even to the extent that they may
not participate at all. If conditionality is conceptualized
as a cost at the margin, it may be leading poor households
to opt out. This paper proposes a framework to model
household decision making on participation (or not) in cash
transfer programs depending on whether a conditionality
exists. The paper outlines the optimal size of the cash
transfer such that a fixed government budget maximizes the
poverty reduction. The paper also shows that unconditional
cash transfers may be preferable over conditional cash
transfers if a government has a sufficiently high degree of
poverty aversion, that is, if, beyond the poverty headcount,
the government cares about how poor the poor are or the
distance of the poorest among the poor below the poverty
line. This basic argument carries over from income poverty
to education poverty. The framework can be useful in shaping
the recent discussion on the merits of universal benefits
over conditional transfers in reducing poverty. |
| format |
Working Paper |
| author |
Rodriguez-Castelan, Carlos |
| author_facet |
Rodriguez-Castelan, Carlos |
| author_sort |
Rodriguez-Castelan, Carlos |
| title |
Conditionality as Targeting? : Participation and Distributional Effects of Conditional Cash Transfers |
| title_short |
Conditionality as Targeting? : Participation and Distributional Effects of Conditional Cash Transfers |
| title_full |
Conditionality as Targeting? : Participation and Distributional Effects of Conditional Cash Transfers |
| title_fullStr |
Conditionality as Targeting? : Participation and Distributional Effects of Conditional Cash Transfers |
| title_full_unstemmed |
Conditionality as Targeting? : Participation and Distributional Effects of Conditional Cash Transfers |
| title_sort |
conditionality as targeting? : participation and distributional effects of conditional cash transfers |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/612891484142967946/Conditionality-as-targeting-participation-and-distributional-effects-of-conditional-cash-transfers http://hdl.handle.net/10986/25949 |
| _version_ |
1764460562813550592 |