Conditional Cash Transfers in the Context of Social Policy by pengtt

VIEWS: 8 PAGES: 27

									Arup Banerji
Director, Social Protection and Labor, World Bank
Budapest, May 7 2010
6 CCCTs?
6 Conditions for Conditional Cash Transfers

Demand for CCTs                       Supply of CCTs

1.   Structural poverty in families   4.   There is access to good
     with children is a major              quality services (schooling,
                                           clinics) available to the
     concern                               target groups
2.   There is under-investment in     5.   There is enough information
     core activities that can              to be able to target
     break the poverty cycle               transparently and set
                                           entry/exit rules
3.   There is shared political        6.   There are no major overlaps
     support for “mutual                   with other cash transfers
     obligation” schemes                   that may cause incentive
                                           „traps‟
Demand for CCTs: 3 Questions
Demand for CCTs: 3 Questions
1. Is structural poverty a major concern for families
with children?
Are families with children (more) at risk of
poverty?
Risk of poverty of specific age groups
in Europe




          Source: Lelkes, Medgyesi and Tóth
Demand for CCTs: 3 Questions
1. Is structural poverty a major concern for families
with children?
2. Is there under-investment in core activities that can
break the poverty cycle ?
Potential under-investment in education
(baselines for CCTs)
Under-investment in secondary education by
Hungarian Roma
                  % of cohort population, Hungary, 2003




               Source: Kertesi and Kezdi (2006)
Returns to Schooling Matter?
Demand for CCTs: 3 Questions
1. Is structural poverty a major concern for families
with children?
2. Is there under-investment in core activities that can
break the poverty cycle ?
3. Is there shared political support for “mutual
obligation” schemes?
CCTs have addressed political constraints to
giving social transfers to the poor
   Arguments about whether all the
    poor are “deserving” led to the first
    “workfare” schemes in the US, which
    imposed a mutual obligation to work
    in exchange for welfare payments
       Modern European “activation”
        policies also have “mutual obligation”
        characteristics as part of the social
        contract
   The state is re-stated as a partner
    rather than a charity, and the poor
    as responsible rather than
    dependent
       In Mexico, Levy and Rodriguez
        (2004) explicitly write:
           Shared responsibility and respect
            inevitably imply a reciprocal effort by
            poor families to link the benefits they
            receive to concrete actions on their part
            … this is independent of technical
            considerations
Supply of CCTs: 3 Questions
Supply of CCTs: 3 Questions
4. Do the target groups have access to good quality
    and complementary services?
Final outcomes in CCTs are often worse
because of inadequate supply
   Most CCT evaluations find little effect on learning outcomes, even
    though school attendance increase
       Longer exposure to Oportunidades program doesn‟t improve learning
        scores (Behrman, Parker, Todd 2000 and 2005)
       More years of schooling does not improve mathematics or language
        scores in Cambodia (Filmer and Schady 2009)
       Most recently, overall school outcomes for elementary or middle school
        students in New York City‟s Opportunity program did not increase
        despite increased school attendance
   A major reason is the quality of schools (or clinics) may not be
    enough to improve outcomes just because of increased exposure
   Distance may also matter – Oportunidades has less impact on
    children who live more than 4 km from a secondary school
Is there adequate supply of quality
schooling for disadvantaged groups?

                                                             2007. Source: OECD 2010




   “… the Roma schools are considered by most teachers as undesirable working places, as
    teaching and education here requires above average effort and results in less success.
   … Although the teachers‟ work in schools where the majority of students are Roma requires a lot
    more than average effort, the wages are just as low as in any other school.”
   Source: Havas, Kemény and Liskó [2002], quoted in Kertesi and Kézdi [2005]
Some US welfare reforms have explicitly
recognized multiple barriers
   The most successful example was the Minnesota Family Independence Program
    (1994-98). Basic aim: To improve on the results on AFDC program in reducing
    poverty through work
   Recognized, and addressed fact that welfare families faced multiple barriers:
       Inadequate education
       Poor work skills
       Little work experience
       Child care responsibilities
       Transportation constraints
       Physical, emotional, addiction issues
   Therefore, paired employment opportunities with:
       Increased support for skills improvement
       Help with child care
       Health care
   Compared to AFDC as usual, MFIP stayed on welfare longer, but were less likely to
    be poor when they left;
   Children‟s outcome (attendance, performance, and health) improved
CCT programs also address complementary
factors
   Chile Solidario program has psycho-social support to beneficiaries
       Social workers work with families on action plans covering 53 “minimum
        conditions” along 7 dimensions:
           Identification and legal documentation
           Family dynamics
           Education
           Health
           Housing
           Employment
           Income
   In Mexico, Oportunidades conditions transfers on new or expecting parents
    participating in talks (pláticas) on parenting, hygiene and nutrition
       Evidence that these have encouraged better diets and improved knowledge on
        health
   Hungary already has introduced pre-schooling support to disadvantaged
    parents in January 2009, which will help
Supply of CCTs: 3 Questions
4. Do the target groups have access to good quality
    and complementary services?
5. Is there enough information to be able to target
     transparently and set entry/exit rules?
Proxy means tests to target can avoid labor
supply disincentives
   Associating eligibility to income thresholds can
    create labor disincentives (as had historically been
    found in US TANF and AFDC)
   Proxy means, which use household datasets to
    “predict” which households are poor based on
    observable “proxies”, can reduce the disincentive
   However, devising proxies when poor and non-poor
    households are too similar in characteristics can be
    difficult
The poor are generally clustered together
in Eastern European Countries




             Source: Tóth (TÁRKI EUROPEAN
             SOCIAL REPORT) 2008
Supply of CCTs: 3 Questions
4. Do the target groups have access to good quality
    and complementary services?
5. Is there enough information to be able to target
     transparently and set entry/exit rules?
6. Are there no major overlaps with other cash
     transfers that may cause incentive „traps‟?
Incentive effect of CCTs muddied if too
many programs transferring resources
   In Mexico, part of the impetus to introduce CCTs
    was to remove and substitute for 15 broad price
    subsidies
     Half   of social funding went to subsidies for tortillas and
      bread, used by non-poor households
     Little coordination across programs, inefficient
      duplication of administration, and no evaluation of
      effectiveness
In 2006, cash transfer programs in Hungary
included:
   Old age pension                                     Family tax allowance (Családi adókedvezmény)
   Disability benefits                                 Regular social benefit (Rendszeres szociális
                                                         segély)
   Maternity Allowance (Terhességi-gyermekágyi
    segély):                                            Nursing Fee (Ápolási díj)
   Maternity Grant (Anyasági támogatás):               Old-age Allowance (Időskorúak járadéka)
   Child Care Allowance (Gyermekgondozási              Home Maintenance Support (Lakásfenntartási
    segély)                                              támogatás)
   Child Care Fee (Gyermekgondozási díj)               Debt-management Benefit (Adósságcsökkentési
   Child Raising Support: (Gyermeknevelési              támogatás)
    támogatás)                                          Public Health Benefit (Közgyógyellátás)
   Family Allowance (Családi pótlék)                   Temporary Benefit (Átmeneti segély)
   Advance on maintenance payments (Tartásdíj          Funeral Support (Temetési segély)
    megelőlegezése)                                     Home renting support (lakbértámogatás)
   Regular Child Protection Benefit (Rendszeres        Interest-free social loan (kamatmentes szociális
    gyermekvédelmi támogatás)                            kölcsön)
   Irregular Child Protection Benefit (Rendkívüli
    gyermekvédelmi támogatás)                           Meals support (étkezési támogatás)
                                                        Local transportation support (helyi utazási
                                                         támogatás)
                                                     Source: TARKI (2006)
Tax-welfare interactions also may give
disincentives to work
6 CCCTs?
6 Conditions for Conditional Cash Transfers

Demand for CCTs                       Supply of CCTs

1.   Structural poverty in families   4.   There is access to good
     with children is a major              quality services (schooling,
                                           clinics) available to the
     concern                               target groups
2.   There is under-investment in     5.   There is enough information
     core activities that can              to be able to target
     break the poverty cycle               transparently and set
                                           entry/exit rules
3.   There is shared political        6.   There are no major overlaps
     support for “mutual                   with other cash transfers
     obligation” schemes                   that may cause incentive
                                           „traps‟
Further information available at
www.worldbank.org/socialprotection

								
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