Outline

Motivation Summary of impact evaluations Conditions Administration

Motivation

Conditional cash transfer (CCT) programs have become very popular: first in Latin America and now across the world

4

Defining Characteristics of CCTs

CCTs- transfer cash*- to poor households- on condition that their children

go to school and use preventive health care

Twin goals:- Immediate poverty relief

through transfers- Long run poverty reduction

through improvements in poor children’s human capital

*food may work too, though with much higher administrative costs

Pot

entia

l cov

erag

eof

poo

r

Improvement in service use

Unconditional cash transfers

Classic CCT in MIC

Secondary scholarship in LIC

CCT for HIV/TB

We focus here today

Demand-side tools to increase service use

A family of program approaches Conditions Education and Health Education Only

Bolsa Familia (Brazil) Oportunidades (Mexico)

Bono de Desarrollo Humano (Ecuador) Bolsa Escola (Brazil) Familias en Acción (Colombia)

Nationwide

Program of Advancement through Health and Education (Jamaica)

Jaring Pengamanan Sosial (Indonesia)

Female Secondary School Assistance Program (Bangladesh)

Chile Solidario Japan Fund for Poverty Reduction Girls Scholarship

Program (Cambodia) Education Sector Support Project (Cambodia)

Niche (regional or

narrow target population) Social Risk Management Project (Turkey)

Basic Education Development Project (Yemen) Programa de Asignación Familiar (Honduras)

Cash Transfer for Orphans and Vulnerable Children (Kenya)

Subsidio Condicionado a la Asistencia Escolar - Bogota (Colombia)

Atención a Crisis (Nicaragua)

Pro

gra

m s

ize/

targ

et

Small scale/pilot

Red de Protección Social (Nicaragua) Punjab Education Sector Reform Program

(Pakistan)

Reasons for growing interest: CCTs have often replaced a myriad of badly

targeted, regressive, ineffective subsidies and piece-meal programs

CCTs as a new “contract” between the state and CCT beneficiaries. Emphasis on “co-responsibilities” rather than “conditions”

CCTs have shown positive results through credible impact evaluation studies

Large-scale CCTs have survived political transitions

2. Evidence of CCT performance:

CCT benefits are decidedly progressive…

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1 2 3 4 5 6 7 8 9 10

Deciles of per capita consumption minus transfer

Prop

ortio

n of

tota

l ben

efits

rece

ived

Bolsa FamiliaChile SolidarioChile SUFEcuador BDHHonduras PRAFMexico OportunidadesJamaica PATHCambodia: JFPRBangladesh FSSP

… but with significant variation in coverage

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

1 2 3 4 5 6 7 8 9 10

Deciles of per capita consumption minus transfer

Prop

ortio

n of

hou

seho

lds

rece

ivin

g tr

ansf

ers

Bolsa FamiliaChile SolidarioChile SUFEcuador BDHHonduras PRAFMexico OportunidadesJamaica PATHNicaragua RPSCambodia: JFPRBangladesh FSSPTurkey SRMP EducationTurkey SRMP Health

Reductions in poverty among beneficiaries

CCT impacts on consumption and povertyMexico(1999)

Nicaragua(2002)

Colombia(2006)

Cambodia(2007)

Median per capita consumption (US $)

0.66 0.52 1.19 0.75

Average transfer (% of per capita consumption)

20% 30% 13% 3%

Impact on per capita consumption (%)

8% 21% 10% --

Impact: headcount index (% points)

1.3** 5.3** 2.9** --

Impact: sqd. poverty gap (% points)

3.4** 8.6** 2.2** --

Families spend a higher share of resources on food and obtain a more varied diet

Disincentive effects have not been a problem Substantial reductions in child work:

Mexico: child labor among teenagers fell by 2% points for girls, and 5% points for boys

Cambodia: reduction of 10% points in work for pay; average of 14 fewer hours worked for pay

Modest reductions in adult labor market participation (Mexico, Ecuador, Cambodia),

Households invest part of the transfer (evidence for Mexico and Brazil –but not in Nicaragua)

CCT impacts on education outcomesCCT impacts on enrollment

Age range

Baseline enrollment

Impact (% points)

Size of transfer

Colombia 8-1314-17

91.7%63.2%

2.1**5.6***

17%

Chile 6-15 60.7% 7.5*** 3-7%

Ecuador 6-17 75.2% 10.3*** 10%

Mexico Grade 0-5Grade 6

Grade 7-9

94.0%45.0%42.5%

1.98.7***

0.620%

Nicaragua 7-13 72.0% 12.8*** 30%

Cambodia Grade 7-9 65.0% 31.3*** 2%

Pakistan 10-14 29.0% 11.1*** 3%

CCT impacts on health outcomes

CCT impacts on health center visitsAge

rangeBaseline

levelImpact (%

points)Size of transfer

Colombia <24 months24-48

months

n.a.n.a.

22.8**33.2***

17%

Chile 0-6 years 17.6% 2.4 7%

Ecuador 3-7 years n.a. 2.7 10%

Honduras 0-3 years 44.0% 20.2*** 9%

Mexico 0-3 years 69.8% 8.4 20%

Nicaragua 0-3 55.4% 13.1* 27%

Impacts on education and health outcomes concentrate among the poor

Example: Nicaragua

Improvements in final outcomes in some but not all cases…

CCT impacts on child nutrition (height-for-age z-scores)Age

rangeBaseline

levelImpact (%

points)Size of transfer

Colombia <24 months24-48

months

n.a. 0.16**0.01

17%

Ecuador <24 months24-48

months

-1.07-1.12

-0.03-0.06

10%

Mexico 12-36 months

n.a. 0.96 cm** 20%

Nicaragua <60 months -1.79 0.17** 27%

Honduras <72 months -2.05 -0.02 9%

Mixed effects in education

Mexico and Colombia: Chilren learning apace with non-participant

peers,

Cambodia: Beneficiaries have more schooling than

children in the control group but didn’t perform better on mathematics or vocabulary test

Encouraging effects on early childhood development…

CCT impacts on child development (children age 3-6)Nicaragua Ecuador

(poorest 40%)Ecuador

(poorest 10%)

Receptive language 0.223***(0.078)

0.011(0.108)

0.177(0.148)

Memory 0.092(0.072)

0.192*(0.105)

0.228**(0.109)

Socio-emotional 0.067(0.065)

0.150(0.103)

0.389**(0.159)

Fine motor 0.150(0.110)

0.160**(0.076)

0.288**(0.117)

Note: all program impacts are in standard deviations.

Limitations on Evaluations

So far almost all evaluations are “black box” designs that do not permit us to distinguish separate effects of: Transfers Conditions Information Change in intra-hh

distribution of resources

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3. Conditions

Why conditions?

Households sometimes invest inefficiently little in child human capital

Persistently underestimate returns to human capital Externalities to education and health investments “Incomplete altruism” between parents and children

Political economy justifications Conditions increase political support to transfer programs Emphasis on “co-responsibilities” rather than “conditions”

There is a lot of variability in the practice:

In the definitions of co-responsabilities –grades, exact services in health and frequency of use, information component, who, etc.

In penalties: “hard” – amount of transfer reduced in next payment cycle, and

by full amount corresponding to action eg. Mexico, Jamaica, Colombia, Turkey

‘softer”: Brazil – first warnings, then social worker assistance Kenya – similar at community leve, then small reduction

In the rigor of monitoring Almost 100% (Mexico, Jamaica); almost 0% (until

recently Ecuador, Dominican Rep, Phillippines)22

Are conditions necessary?Mexico:

Children in households w/o monitoring 5.4% points less likely to enroll in school

Ecuador: Program effects are only significant for

households that believed transfer are ‘conditonal’

Cambodia: Program has no effect on enrollment for siblings

at other levels

Malawi: Experimental program early results show UCT

and CCT effects similar

There are tensions between social assistance and human capital goals

Mexico: Impact on enrollment most significant at transition grades. But targeting transition reduces ability to redistribute income.

40

50

60

70

80

90

100

P2 P3 P4 P5 P6 S1 S2 S3 S4

Continuation rate (%)

Primary school

Lower secondary school

Secondary64%

Entering grade

PROGRESA INTERVENTION Upper secondary

school43%

Progresa villages

Control villages

76%

50%

The size of these tradeoffs vary by context

Mexico (2002)

Cambodia (2004)

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

1 2 3 4 5 6 7 8 9

Grade

Surv

ival

Rat

ePo

ores

t 20%

Complementary interventions

CCTs are not the only policy needed

Improvements in access or quality of health and education services – and most countries with CCT programs also have initiatives in these directions

CCTs may be complemented by other social assistance and social insurance programs

4. Administration

Systems for monitoring compliance

Require real time collection and use of data flowing between multiple agencies

Are demanding, but mature programs do not have excessive adminstrative costs

I sometimes think the data flow expertise is secret weapon of CCT programs

The institutional legacy of CCTs

Led the way in the design of well-run administrative structures for beneficiary selection, payments, transparency

Groundbreaking importance paid to impact evaluation with credible counterfactuals

The record of the early programs in these regards was not inherent to CCTs, but should be safeguarded and emulated