Conditional Cash Transfers and

Rural Development in Latin America

Country Study: El Salvador

Margarita Beneke de Sanfeliú,

Amy Angel and Mauricio Shi

Introduction to the regional project

• This research will try to understand how households react to

the intervention of both Conditidonal Cash Transfers (CCT)

and Rural Development Projects (RD), like those promoted by

IFAD, compared with being exposed to only one of these

interventions.

• We aim to identify synergies and complementarities between

both types of interventions.

• If synergies are identified, development projects could be

more effective in reducing poverty, and CCT programs could

find better 'graduation strategies'.

Project objectives

• To describe and understand the mechanisms (at the household

and community levels) through which there exist or could exist

synergistic effects between rural development and CCT

programs.

• To inform policy makers at the national level and international

organizations that provide financing for CCTs and rural

development projects, about the potential for synergistic effects

between both types of interventions, and to suggest alternative

program designs to enhance and exploit these effects.

• To provide feedback and build capacity within IFAD's Country

Program Managers and country teams, to take greater

advantage of potential synergistic effects between IFAD projects

and CCT programs.

Project strategy • COMPONENTS

– Technical component: evaluate the effect of having access to

CCT and RD, in terms of use of economic assets, poverty

reduction, gender effects and financial inclusion.

– Policy advocacy component : generate lessons and influence

policy decisions so that key aspects such as graduation from

CCTs or participation in RD projects take advantage of

multiplier effects that can enhance impact in reducing poverty

and improve resilience of poor rural women and men.

• COUNTRIES

– Group 1: Colombia, Peru, El Salvador: primary data collected

– Group 2: Mexico, Brazil and Chile: analytical studies with

secondary data, to provide lessons for group 1.

• SCIENTIFIC COMMITTEE

Project hypothesis

• Households that are beneficiaries of CCT programs and are

involved in IFAD-RD projects compared with families that just

receive one type of intervention (CCT or IFAD-RD) and with

families that do not receive any kind of intervention

– Will be more successful the income level of the families

or in a given measure of poverty

– Will have greater access to the formal financial markets

financial inclusion indicators.

– Women will be more empowered role in household

decisions

– Will have better opportunities to allocate and enhance

economic assets productivity of production systems

within the household.

Methodology

• Literature review, sistematization of other impact evaluations

and surveys

• Document programs (CCT and DR)

• Mixed methods

– Quantitative: Household survey. One round (trying to get

before info from some other source).

– Qualitative: focus groups and in depth interviews with

households, project administrator, and communities

• Dialogue with Policy makers, program administrators,

politicians, other groups interested in RD

CCT in El Salvador:

Comunidades Solidarias Rurales (CSR) • Conditional cash transfers: Education bonus (up to 6th grade), health

bonus (0-5 yrs old), combination: $15 per month if only one, $20 per month if both.

• Only one bonus per family (possible more than 1 per household). Current average: $15.18

• The program is in 100 municipalities (of 262): rolling entry by level of poverty.

• Important: A family could join the program only they met qualifying hara teristi s at the o e t of the e sus

• Currently 75,385 beneficiaries (down from 101,000): 6% of total households, 14% poor population. Budget: 0.06% of GDP.

• The progra i ol es: capacitaciones a d opportu ities to so ialize

• Impacts: attracting older children that were out of the system, early entry to school; frequent health check-ups; nutrition protected in food shock episode.

IFAD and MAG RD Programs

PAF: Family Agricultural Plan • Value Chains (VC):

– Small and medium commercial farmers – Field schools – Assistance to joint purchases of inputs and marketing of

products – Transfer of production technology and credit (in one program) – 35% most be women and younger men

• Food Security (FS) – Subsistence farmer families – Field schools for traditional crop improvement and crop

diversification, natural resource management and home health.

– Uses demonstration families who transfer knowledge and technology to secondary families through demonstration plots and direct training

– Inputs and time saving equipment (stoves and water containers)

– 35% most be women

Comparison groups

Beneficiaries Others

CCT A B

No CCT C D

RD Projects

Possible

graduation strategy

Beneficiaries Others

A B

Exited AC BD

Never C D

RD Projects

CCT

No CCT

Sample frame

• Sample frame constructed combining several sources of info:

– Ministry of Agriculture: 5 listings (FS and VC 2010-2013)

– FISDL: CSR Census (info for ALL households in 100 municipalities) and complete CCT beneficiaries data base

We were able to match 19,342 individuals in 14,184 households

• From the complete sample frame, we eliminated households:

– With more than one CCT participant (5%), so remaining households would have similar transfer values

– Exited CCT or entered a RD program before 2012

– Without at least one child two years below or above the limit for CCT at the time of selection into the program (So treatment and o trol households ould e al ost eligi le to re ei e CCT

– Households in municipalities without RD programs (so all remaining could potentially participate).

• Each observation in the sample frame was classified into one of

the groups: A,B,C,D, AC, BD

– Comparisons among groups with RD beneficiaries can be

done directly A, C and AC

– Comparisons involving groups with and without RD

beneficiaries cannot be done directly (possible selection bias):

B, D and BD

• Beneficiaries of FS and VC programs appear to be different in

variables in Proxy means test used by CSR (according to

descriptive statistics using origi al e sus data . • We used discriminant analysis to classify non-RD beneficiaries

into one of the B, D and BD (separating by FS and VC) Using variables in

CCT Proxy means

test

Sample frame… cont)

• To assign each observation to a treatment a control group for

ea h strateg a d t pe F“ or VC

- We used Propensity Score Matching (PSM) for each pair

of treatment and control. We left only those observations

in the area of common support

- We only found comparison-pairs that were sufficiently

similar for the following strategies:

6,176 households in 54 municipios

Sample selection (cont…

No. Treatment Comparison FS VC

1 A (CCT+RD) C (RD) YES YES

2 A (CCT+RD) B (CCT) NO NO

3 A (CCT+RD) D (None) NO NO

4 C (RD) D (None) NO NO

5 B (CCT) D (None) NO NO

6 A (CCT+RD) AC (CT + RD) YES NO

7 AC (CT + RD) BD (CT) YES NO

8 AC (CT + RD) C (RD) YES NO

Sample design

Available observations

Randomly

selected from

all available in

each group

FS VC

A CCT + RD 918 287 1,205

C RD 325 185 510

AC CCT + RD 643 643

BC CCT 3,818 3,818

5,704 472 6,176 Total

RD typeGroup Total

FS VC

A CCT + RD 250 287 537

C RD 250 185 435

AC CCT + RD 250 250

BC CCT 250 250

1,000 472 1,472 Total

GroupRD type

Total

Actual Intersection

of CCT and RD VC and FS

FS only

Geographical location of

final sample

Similar to:

Field work:

27 Jan- 1 april

FS VC

A CCT + RD 241 239 480

C RD 213 152 365

AC CCT + RD 230 230

BC CCT 226 226

910 391 1,301

GroupRD type

Total

Total

Final sample

Survey Questionnaire Modules A. Identification

B. Household composition (HC)

C. Education (HC)

D. Health (HC)

E. Ocupation and labor market (W)

e.1 Ocuations details (I) (D)

e.2 Job search

F. Information about land (PC)

G. Agricultural production g.1 Crops (D)

g.2 Animales (D)

g.3 Equipamiento (CF)

H. Associations and social capital h.1 Participation in associations

h2. Community relationship

I. Rural Development proyects

i.1 Food security

i.2 Value chains

J. Housing conditions and assets (PC)

K. Remittances and other income (I) (D)

L. Food security (Proxy, I)

M. Expectations, aspirations and

empowement m.1 General perceived self-efficacy

m.2 Mood and self-esteem

m.3 Locus of control

m.4 Aspirations

m.5 Decision making (W)

N. Delinquency and other security issues

O. Financial services(FI)

m.1 Debts

m.2 Savings

P. Shocks

CH: Human capital

PC: Physical captal

D: Economic Diversification

I: Income

FI: Financial inclusion

W: Rol of women

Qualitative strategy • Stage 1. Before survey (to inform data collection)

– Focus groups with:

• CSR regional staff

• IFAD program coordinators

• Field staff RD programs

– Interviews with CSR and RD administrators

• Stage 2. After survey (to explain and further explore findings and possible RD program modifications)

– Feedback from survey fieldwork personnel

– Focus groups and semi-structured interviews (perceptions of 106 individuals selected from survey sample)

• A, C, AC and BD, to explore the why of results)

– Interviews with community leaders

– Interviews with CSR and RD staff

Identification strategy From survey results we noted:

- From the original CSR census (2005 to 2009) to the survey in

2014, there was some household restructuring (some

e ers left CCT households a d took transfers with

them, or new members rought transfers to non-CCT

households).

- Some households that were identified as users of RD

programs in the official listings, responded that they were

not actual beneficiaries

Identification strategy: Intent to Treat Effect, using

single difference with PSM (variables in original census)

Additional research questions: In El Salvador, what generates synergy between RD and CCT

programs, ash or something else ? Is adding RD a good

graduation strategy ?

Given that:

The $ transferred is very small (avg. $15.18 per month, currently

payable $60 every 4 months); amount is the same since 2005

Previous evaluations of CSR showed that women´s empowerment

(mainly in the domestic domain i reased due to capacitaciones and opportunities for social interaction provided by the program

We test the (additional) hypothesis that the $ amount is NOT what

generates the synergy:

Results [A (CCT + RD)] = Results [AC (CCT + RD)]

If this is the ase, the addi g RD after e iti g CCT progra ould e a good graduatio strateg

Results [AC (CCT + RD)] > Results [BD (CCT)]

A (TMC+DR) AC (TMC+DR) BD (TMC) A vs AC

Empowerment

Empowerment Index 66.3% 68.4% 64.8% 3.6% **

Domain: Production 71.6% 77.2% 66.6% 10.6% ***

Domain: Resources 54.8% 56.8% 50.6% 6.2% **

Domain: Income 87.3% 88.9% 80.3% 8.6% ***

Financial Inclusion:

Accounts or formal credit formal inst. 22.4% 21.7% 15.0% 6.7% **

Income proxy:

Asset index (productive or household) 7.70 8.47 7.63 0.84 ***

Reduced assets because of food insecurity 22.8% 22.6% 28.3% -5.7% *

N 241 230 226

Característica

Group Differences

AC vs BD

In El “alvador, something else generates synergy

between RD and CCT programs… and adding RD is a

good graduation strategy …

• We did not find a significant difference in outcomes for those still receiving CCT and those who exited the program

• Adding RD produ es gains …. even in empowerment

… especially for women

Empowerment

increased, even

i o domestic domains

A (TMC+DR) AC (TMC+DR) BD (TMC) A vs AC

WOMEN

Empowerment

Empowerment Index 58.5% 62.4% 59.0% 3.4% *

Domain: Production 50.0% 66.3% 53.9% 12.5% **

Domain: Resources 41.4% 48.9% 42.7% 6.2% *

Domain: Income 82.3% 87.5% 77.1% 10.4% **

Financial Inclusion:

Accounts or formal credit formal inst. 20.2% 16.7% 14.1%

Income proxy:

Asset index (productive or household) 7.69 8.14 7.39 0.75 **

Reduced assets because of food insecurity 22.6% 20.0% 32.4% -12.4% **

N 124 120 142

MEN

Empowerment

Empowerment Index 74.6% 74.8% 74.6%

Domain: Production 94.4% 92.3% 88.0%

Domain: Resources 68.9% 65.5% 63.9%

Domain: Income 92.7% 90.5% 85.7%

Financial Inclusion:

Accounts or formal credit formal inst. 24.8% 27.3% 16.7% 10.6% *

Income proxy:

Asset index (productive or household) 7.71 8.83 8.06 0.77 **

Reduced assets because of food insecurity 23.1% 25.5% 21.4%

N 117 110 84

Selected variablesGroup Differences

AC vs BD

Financial

inclusion

increased

Results • We could identify some positive synergies (Intent to Treat

Effects) in all domains evaluated (income, empowerment,

financial inclusion)

• There is e ide e that the other a ti ities of the CCT progra capacitaciones a d opportu ities of so ial interaction) combined with RD, produce gains, especially for

women.

• Results in terms of empowerment in areas other than

do esti , are larger for o e . • There is evidence that RD programs could be good

graduatio strategies for CCT e efi iaries

• Preliminary qualitative results suggest that there is

substantial potential for improving results we should be

able to suggest modification to program design and

implementation, including further inter-agency coordination

Conditional Cash Transfers and

Rural Development in Latin America

Country Study: El Salvador

Margarita Beneke de Sanfeliú,

Amy Angel and Mauricio Shi