Conditional Cash Transfers

Question 1

What are the advantages of targeted welfare systems?

Answer 1

Those who most need the benefit receive it. Low disincentive to work as only certain groups are eligible.

Question 2

What are the disadvantages to targeted welfare systems?

Answer 2

1) Measurement errors
2) Family Formation incentives
3) Efficiency loss through cost to monitor eligibility
4) Ethical Issues

Question 3

What are the disadvantages of universal programs?

Answer 3

1) Efficiency Loss as those who need benefits most receive limited resources
2) Disincentives to work

Question 4

What are the Objectives of CCTs?

Answer 4

1) Reduce poverty and Inequality
2) Break inter-generational transfer of disadvantage
3) Empower vulnerable by linking to appropriate ppublic services

Question 5

What is the structure of CCTs?

Answer 5

1) Target ‘eligible’ households - exclusively ‘poor’
2) Provide transfers to households
3) Set conditions and responsibilities on the household in order to maintain the transfer
4) Use a combination of geographic and means-testing identification

Question 6

What were the benefits/conditions of Progresa?

Answer 6

1) Education - grants given to mothers (then children) as long as child has 85% attendance at school and doesn’t resit more than once
2) Health and Nutrition - Cash transfers and nutritional supplements as long as family engages with preventive care and mothers attend talks

Question 7

What are the advantages of CCTs?

Answer 7

1) Economically, human capital investment is below social optimum, parents undervalue returns - ‘incomplete altruism’ as parents discount future more heavily. Positive externalities of education investment.
2) Politically, it gathers support from both wings, it helps the poor and redistributes whilst being a low-cost/GDP initiative that incentivises private investment

Question 8

What are the disadvantages to CCTs?

Answer 8

1) Conditionality is costly through constant monitoring
2) Could lead to exclusion of those who most need the transfers
3) Ethically, social protection is a human right, conditions shouldn’t apply

Question 9

What was the evaluation design of Progesa?

Answer 9

1) In-built into the scheme, looking at the short/long term effects.
2) Controlled randomisation was used to choose which eligible villages would be ‘treatment’ or ‘control’. These villages were identical at the baseline
3) The treatment villages received the benefits 18 months before the control villages
4) Looked at the difference between the control group and treatment before the control group received benefit

Question 10

What dimensions are used to measure the impact of Progresa?

Answer 10

1) Education and Time use
2) Health and Nutrition
3) Household Consumption
4) Gender and Demographic
5) Political and Environmental

Question 11

What were the findings of progresa with regard to Education/Time-use?

Answer 11

1) Short-term effects well established - Enrolment and completed years increased whilst grade repetition decreased. No evidence for long-term effects (wage increases) often poor quality schooling.
2) Child-labour decreased as conditions meant children had to be in school whilst the grants reduced the need for child income
3) Adult labour did not decrease as women had to make up for chores. Elasticity for leisure was low. Transfers seen as ‘temporary’ so no incentive to change behaviour

Question 12

What were the findings of progresa with regard to Household Consumption?

Answer 12

1) Increase in consumption - predominantly food

2) Increase in entrepreneurship and self employment

Question 13

What were the findings of progresa with regard to Gender/Demographic?

Answer 13

1) Improved decision making power of women
2) Reduced domestic violence
3) Increase in marriage/cohabiting
4) No change in fertility
5) Delay marriage and child-bearing

Question 14

What was Gertler’s (2004) aim and what did he find?

Answer 14

1) To see if Progresa improved child health
2) Newborns 25.3% less likely to be ill, 0-3 yo 22.3% less likely. 2+ yo 39.5% less likely.
3) Height was 0.96 cm taller
4) 25.3% less likely to be anaemic
5) The longer in the program from a younger age, the larger the improvement
6) Was this conditions or income?

Question 15

What was the evaluation design of Colombia’s CCT?

Answer 15

1) Aim: to investigate impact on medium/long run effect on education on various program designs across 2 districts in Bogota and compared to control group.
2) ‘Basic Treatment’, ‘Saving Treatment’ grade 6-11
3) ‘Tertiary’ treatment grade 9-11
4) All revenue neutral, different incentives

Question 16

What were the findings of Colombia’s CCT?

Answer 16

1) All treatment groups increased on-time enrolment with ‘savings’ having best results.
2) No impact on the percent of those taking exit exam
3) Tertiary enrolment - ‘Basic’ no effect, ‘Tertiary’ had high enrolment into lower quality institutions whilst ‘Savings’ had higher quality institutions.
4) 5-10 years after education, no impact on overal tertiary enrolment

Question 17

Conclusions of Colombia’s CCT

Answer 17

1) Increase in on-time enrolment was caused by lower drop-outs, no evidence to suggest students were incentivised
2) Removing the saving constraint was more important than conditionality. Conditionality had adverse effect.
3) Long-term, the control group caught up, the program just accelerated enrolment.