Title: Ariel Fiszbein Chief Economist Human Development World Bank
1Ariel FiszbeinChief EconomistHuman
DevelopmentWorld Bank
2Motivation
- Many developing countries around the world have
conditional cash transfer (CCT) programs in place - CCTs have shown positive results through credible
impact evaluation studies source of their
popularity - Focus on household behavior relevant for social
policies in developed countries as well - Policy Research Report summarizes lessons of
experience
3Outline
- Present findings of report
- Discuss implications for social policy
4The CCT revolution
5The CCT Revolution
6Motivation
- Programs vary, but all share some basic
characteristics - They transfer cash
- They ask that households comply with a series of
conditionsgenerally, school enrollment and
attendance, often also attendance at health
centers for young children - They are targeted to the poor
- Twin objective promise of programs
- Reduce current consumption poverty
- Promote accumulation of human capital
7A family of program approaches
8CCT impacts on poverty
- Message 1 CCTs have generally led to substantial
reductions in consumption povertyin particular,
when transfers are large - In Nicaragua, the Red de Protección Social, a
pilot program, reduced the poverty gap among
beneficiaries by 18 percent - In Mexico, PROGRESA (now Oportunidades), a
program with national coverage, reduced the
poverty gap in rural areas by 19 percent
9Impacts on consumption and poverty
Mexico (1999) Nicaragua (2002) Colombia (2006) Honduras (2002)
Average transfer ( of per capita consumption) 20 30 13 11
Impact on per capita consumption () 8.3 20.6 10 7
Impact headcount index ( points) 1.3 5.3 2.9 --
Impact poverty gap ( points) 3.0 9.0 7.0 2.0
Impact sqd. poverty gap ( points) 3.4 8.6 2.2 2.0
10CCT impacts on poverty
- Why have CCTs reduced consumption poverty?
- They are well-targeted
- They have made transfers of (in some cases)
substantial magnitude - They have not reduced adult labor market
participation - They have not generally crowded out other
transfers, and have not had substantial (local)
general equilibrium effects - Transfers (which are generally made to women)
have also changed the composition of consumption - More expenditures on food, and on higher-quality
sources of calories
11CCT impacts on food consumption
12Impacts on health and education outcomes
- Message 2 CCTs have resulted in substantial
increases in the utilization of education and
health services especially among poor
households - Examples education
- In Mexico, Oportunidades decreased dropout
between 6th and 7th grade by 9 points - In Pakistan, the Punjab Education RSP increased
the school enrollment of 10-14 year-old girls by
11 points - In Cambodia, two pilot programs reduced the
dropout between 6th and 7th grade by 20-30
points - Examples health
- In Colombia, Familias en Acción increased the
proportion of children who had growth monitoring
by 20-30 points - In Honduras, PRAF increased the proportion of
children who had at least one preventive health
visit by 20 points
13Impacts on school enrollment
Age range Baseline enrollment Impact ( points) Size of transfer
Colombia 8-13 14-17 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 0-5 Grade 6 Grade 7-9 94.0 45.0 42.5 1.9 8.7 0.6 20
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
14Impacts on health service utilization
Age range Baseline level Impact ( points) Size of transfer
Colombia lt24 months 24-48 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
15Impacts are concentrated on the poorest households
16Impacts on education and health outcomes
- Message 3 Despite increase in service
utilization, CCTs have had only mixed success in
terms of improving final outcomes in education
and health - Education
- Increases in school enrollment and years of
completed schooling have not come hand-in-hand
with improved learning outcomes - Health
- Some programs, but my no means all, have improved
child nutrition (as measured by height-for-age,
hemoglobin status)
17CCT impact on child nutrition
Age range Baseline level Impact ( points) Size of transfer
Colombia lt24 months 24-48 months n.a. 0.16 0.01 17
Ecuador lt24 months 24-48 months -1.07 -1.12 -0.03 -0.06 10
Mexico 12-36 months n.a. 0.96 cm 20
Nicaragua lt60 months -1.79 0.17 27
Honduras lt72 months -2.05 -0.02 9
18Impacts 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. Note all program impacts are in standard deviations. Note all program impacts are in standard deviations. Note all program impacts are in standard deviations.
19Outline
- Present findings of report
- Discuss implications for social policy
20Designing transfers to maximize impact on human
development outcomes
- Which behaviors should be targeted?
- Quality of services what kind of services are
beneficiaries of welfare programs actually
receiving? - Incentives to service providers
- Intermediation services
- Conditioning on outcomes?
- If under control of beneficiaries (e.g. STDs)
- If combined with incentives to providers (e.g.
learning outcomes) - Bonuses
21Designing transfers to maximize impact on human
development outcomes
- Change behaviors within households that prevent
the accumulation of human capital. - Programs to improve parenting and early
stimulation (as in the pláticas of
Oportunidades or social-worker support as in
Chile Solidario) - Targeting the right age group
- Life-cycle skill formation as dynamic process
(Heckman et al.) - Early stimulation and pre-school programs
22Why condition?
- Economic justifications
- Persistently misguided beliefs
- Incomplete altruism
- Externalities
- Political economy justifications
- Greater support for a program that appears to ask
beneficiaries to do something to help
themselves - CCTs as new contract between the state and
beneficiaries. Emphasis on co-responsibilities
not conditions - Research on social perceptions (e.g. Brazilian
press, Argentina opinion polls)
23Do conditions work?
- Conditions do play a role in increasing service
use beyond income effect (at least in education) - 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
conditional - Cambodia Program has no effect on enrollment for
siblings at other levels
24Avoiding negative effects of transfers
- Why didnt CCTs have negative effects on labor
supply? - Leisure effect low b/c of fine targeting
- Avoided high marginal tax rates by use of
proxy-means and infrequent update - Design options
- Time limits (Chile)
- Graduated benefits (Brazil)
- Combining with other programs (e.g. workfare)
25Institutional Issues
- CCTs have had important institutional legacies
- CCTs have led the way in the design of well-run
administrative structures for beneficiary
selection, payments, transparency - CCTs have been groundbreaking in terms of the
importance they have paid to impact evaluation
with credible counterfactuals
26END