Conditional Cash Transfer Programs: Experiences

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Conditional Cash Transfer Programs Experiences
Prospects

• Emmanuel Skoufias
• IADB

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CCT programs in Perspective

• Objectives Max Social Welfare
• Instruments Programs that redistribute income
• Constraints
• Economic (fixed budget)
• Social
• Political

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Dual Objectives of CCT

• Long-run poverty alleviation through investment
  in human capital (i.e., education, health and
  nutrition)
• Early Interventions have much higher returns over
  life-cycle
• Short-run effect on poverty through cash
  transfers

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Means used to achieve CCT objectives

• (Better) Targeting
• Simultaneous intervention in 3 key sectors
  (synergy)
• Conditioning cash transfers to regular school
  attendance and visits to health centers
• Cash transfers given to mothers
• Parallel support on Supply Side (schools health
  centers)

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Why Evaluate Programs?

• Economic Reasons
• Improve design and effectiveness of program
  evaluated
• Comparing program impacts allows G to reallocate
  funds from less to more effective programs and
  thus to an increase in Social Welfare
• Social Reasons (increases accountability)
• Political Reasons
• Credibility/break with bad practices of
  past/chances of re-election

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Key elements of a successful and rigorous
evaluation

• Evaluation built-in as a component of the program
  early in the program design stages
• Evaluation has clear objectives
• Impact?
• Program Design? e.g. PROGRESA package
• Evaluation has political support
• Evaluation Design that yields credible estimates
  of Impact

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Key elements of a successful and rigorous
evaluation

• Log frame helps identify subject to the budget
  constraint available (agreed) upon
• objectives
• setting indicators of impact
• data needs (quantitative and qualitative)
• the threshold value of the CHANGE in impact
  indicator if a program HAS an effect
• Survey sizes needed
• Budget allocated to the evaluation

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Key elements of a successful and rigorous
evaluation

• Pre-existing household surveys administrative
  data
• Can be used for an ex-ante evaluation of the
  expected program impact and determining size of
  benefits (design)
• Can be used to evaluate program impact (using
  before after estimator)

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Evaluation Design

• Evaluation Designs differ in how they construct
  comparison/control group
• Experimental (Most credible but full of
  obstacles)
• Quasi-experimental Before and After, Matching
  Method, Regression Discontinuity Design
• Non-experimental Instrumental variable methods

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PROGRESA Evaluation Design

• EXPERIMENTAL DESIGN Program randomized at the
  locality level
• Sample of 506 localities
• 186 control (no PROGRESA)
• 320 treatment (PROGRESA)
• 24, 077 Households (hh)
• 78 beneficiaries
• Can use Double Difference Estimator to evaluate
  impact

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Evaluation Tools

• Formal surveys
• (Semi)-structured observations and interviews
• Focus groups with stakeholders (beneficiaries,
  local leaders, local PROGRESA officials, doctors,
  nurses, school teachers, promotoras)

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PROGRESA Evaluation Surveys/Data
BEFORE initiation of program Oct/Nov 97 Household census to select beneficiaries March 98 consumption, school attendance, health AFTER initiation of program Nov 98 June 99 Nov/Dec 99 Included survey of beneficiary households regarding operations
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PROGRESA Evaluation Surveys

• Additional Info Sources
• School clinic survey
• School and clinic administrative data
• Nutrition survey conducted independently by Min.
  of Health and INSP
• Student achievement test scores by Min of
  Education
• Record of payments distributed to beneficiary
  households

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Topics of PROGRESAs Evaluation

• Targeting accuracy and impact on poverty
• School enrollment, attendance, child labor,
  achievement scores
• Health and utilization of health facilities
• Child Nutrition
• Household Consumption Nutrition

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Topics of PROGRESAs Evaluation contd

• Operation of the program and perceptions of
  stakeholders
• Cost-Analysis and Cost Effectiveness
• Status of women, community relations
• Adult labor supply, intrahousehold transfers

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Evaluation Results-Targeting

• Geographic targeting of the program in rural
  areas is good
• Method of selecting poor households within
  localities is generally accurate (undercoverage
  of 7 )
• PROGRESAs targeting decreases the poverty gap
  P(1) by 30 and the severity of poverty P(2) by
  45

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NOTE Program Operation Impact

• Linkage between program operation
  implementation estimated program impact
• Delays in Benefit Distribution
• Mistakes in lists of Beneficiaries
• Intention to Treat Effect vs Treatment Effect on
  those who actually received treatment

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Education

• Are more children attending school because of
  PROGRESA?
• How much can schooling be expected to increase?
• Are there more cost effective ways of bringing
  children to school?
• Does PROGRESA have more impact in certain grades?
• Any effects on drop-out rates, grade progression,
  repetition, reentry?

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Evaluation Results Education

• PROGRESA has a positive effect the school
  attendance of both boys and girls in primary and
  secondary school
• Boys in secondary increase by 8
• Girls in secondary increase by 14
• Negative impact on childrens labor market
  participation (especially boys)
• No observed increase in the attendance rate
  (frequency) of children in school.
• PROGRESA increases overall educational attainment
  by 10 (and 8 higher earnings)

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Evaluation Results Education

• Program effective in keeping children in school
  especially during the critical transition from
  primary to secondary
• Less effective in bringing back to and keeping in
  school children who were out.
• Earlier entry ages, less grade repetition, better
  grade progression
• PROGRESA more cost-effective than increasing
  access to junior secondary education

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Cost Analysis

• Are the administrative costs of PROGRESA high?
• What are the private costs associated with
  participation in the program?
• What might be the indirect effects of the program
  on the national economy? (e.g. financing of the
  program)?

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Evaluation Results Cost Analysis

• For every 100 pesos allocated to the program, 8.2
  pesos are administration/program costs.
• Very low compared to LICONSA (40 pesos per 100
  pesos) and TORTIVALES (14 pesos per 100)
• Targeting and conditioning of the program makeup
  56 of program costs (4.6 pesos out of 8.2 pesos)
• Private costs (3.8 pesos out of 8.2 pesos)

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Evaluation Results Cost Analysis

• Eliminating distortionary food subsidies and
  using funds to finance a program like PROGRESA
  leads to substantial welfare gains.

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Critical Issues to be Resolved

• Do CCT programs break the intergenerational
  transmission of poverty? Need long time-series
• Is Conditioning necessary?
• What if give unconditional cash transfers?
• What is the minimal CCT that may be paid?

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On the effects of a CCT

• CCTRestricted income-related transfer
• Receive transfer ONLY IF have 85 attendance
  rate
• Enrollment vs attendance (conditional on
  enrollment)
• Effect of CCT will differ depending on initial
  attendance rate (initial distance from attendance
  requirement)

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The Effect of a Conditional Cash Transfer on
Child School Attendance and Work
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On the Effects of a CCT

• There is a minimum cash transfer required to
  induce Sgt85
• If Sgt85 income effect on attendance rate
• If Slt85 ?income effect and substitution effects
  reinforce each other
• Early drop-outs go back to school?expect large
  effects on enrollment (initially)

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Critical Issues to be Resolved

• Impact on Childrens Achievement Learning?
• Do CCT increase achievement or induce teachers to
  lower grade-passing standards?
• Teacher health worker incentives
• Quality of Services

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Critical Issues to be Resolved

• Do CCT generate Program/Welfare Dependency?
• So far no negative incentive effects on
  adult work
• Transfers Income generation
• Do/Can CCT programs fulfill role of safety net
  at times of crises?
• Lack built-in flexibility to expand coverage to
  households falling below poverty during crisis

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Final Issue

• Long-Run Sustainability of Program Budget
  Political Economy of Program Support

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Research Department Inter-American Development
Bank
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Additional Background
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Health

• Does it increase visits to public health clinics?
• Does PROGRESA have an effect on child health?
• On the health of adults?

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Evaluation results Health

• Significant increase in visit rates in PROGRESA
  communities
• Increasing in nutrition monitoring visits,
  immunization rates and prenatal care in 1st
  trimester (8 increase)
• No substitution between private and public
  facilities

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Evaluation results Health

• 12 lower incidence of illness in children
  between ages 0-5.
• Significantly positive effects on adult health

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Nutrition

• Does PROGRESA impact of child growth?
• Household consumption and food diet?

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Evaluation results Nutrition

• Significant effect at increasing child growth
  (1cm higher growth) and reducing the probability
  of stunting among children 12-36 mo.
• Household total consumption increases
• PROGRESA households eat better (higher
  expenditures on fruits, vegetables, meats
  animal products)