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Cash Transfers in Latin America: Effects on Poverty and Redistribution

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  • Verónica Amarante
  • Mart�n Brun

Abstract

We present comparative evidence for eight Latin American countries regarding the design and effects of cash transfers (CTs). On the basis of household survey data, we analyze their coverage, importance in household income, and effects on poverty reduction and income redistribution. We present a static microsimulation to analyze the potential impacts of alternative pro- gram designs, including perfect targeting and higher budgets. Our results illustrate wide variation in terms of design, coverage, and importance in household income. CTs account for a significant portion of household income in lower deciles. Nonetheless, their effects in terms of reducing the incidence, intensity, and severity of poverty are moderate at best, and although their progressivity is high, their redistributive impact is limited. These results are mainly explained by the meager resources involved. Even under perfect targeting, the budgets allocated would be insufficient to achieve full coverage among households in the lowest part of the income distribution.

Suggested Citation

  • Verónica Amarante & Mart�n Brun, 2018. "Cash Transfers in Latin America: Effects on Poverty and Redistribution," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2018), pages 1-31.
    • Handle: RePEc:col:000425:016952
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    Cited by:

    1. Leight, Jessica & Hirvonen, Kalle & Zafar, Sarim, 2024. "The effectiveness of cash and cash plus interventions on livelihoods outcomes: Evidence from a systematic review and meta-analysis," OSF Preprints dnc2r, Center for Open Science.
    2. Jara, H. Xavier & Montesdeoca, Lourdes & Colmenarez, María Gabriela & Moreno, Lorena, 2025. "Two decades of tax-benefit reforms in Ecuador: How much have they contributed to poverty and inequality reduction?," World Development, Elsevier, vol. 190(C).
    3. Qilin Liu & Qianqian Li, 2023. "Impact of New Rural Pension Insurance on Farmers’ Agricultural Mechanization Service Inputs," Sustainability, MDPI, vol. 15(2), pages 1-18, January.
    4. repec:osf:osfxxx:dnc2r_v1 is not listed on IDEAS
    5. Perova,Elizaveta & Johnson,Erik Caldwell & Mannava,Aneesh & Reynolds,Sarah Anne & Teman,Alana Hinda, 2021. "Public Work Programs and Gender-Based Violence : Evidence from Lao PDR," Policy Research Working Paper Series 9691, The World Bank.
    6. Villatoro S., Pablo & Cecchini, Simone & Mancero, Xavier, 2021. "The impact of non-contributory cash transfers on poverty in Latin America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    7. Maria Alessandra Antonelli & Valeria De Bonis, 2021. "Economic Poverty: Does the Break-Up of Families Matter?," Social Sciences, MDPI, vol. 10(6), pages 1-20, June.
    8. Andrés Dean & Fernanda Diab & Juan Olano & Agustín Reyes & Guillermo Sánchez-Laguardia & Juan Ignacio Urruty, 2023. "Empleo Garantizado por el Estado y Renta Básica Universal: estrategias para enfrentar el problema estructural del empleo precario," Documentos de Trabajo (working papers) 23-22, Instituto de Economía - IECON.
    9. Ivone Perazzo & Analía Rivero & Andrea Vigorito, 2021. "¿Qué sabemos sobre los programas de transferencias no contributivas en Uruguay? Una síntesis de resultados de investigación disponibles sobre el PANES, AFAM-PE y TUS," Documentos de Trabajo (working papers) 21-33, Instituto de Economía - IECON.

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    Keywords

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    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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