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The Growth of Conditional Cash Transfers in Latin America and the Caribbean: Did They Go Too Far?


  • Stampini, Marco

    () (Inter-American Development Bank)

  • Tornarolli, Leopoldo

    () (CEDLAS-UNLP)


Conditional Cash Transfers (CCTs) are an endogenous innovation from Latin America and the Caribbean (LAC) that aims to reduce current poverty while developing the human capital of the next generation, in the attempt to break the intergenerational transmission of poverty. Pioneered in Brazil and Mexico in the late 1990s, by 2011 CCTs had spread to 18 countries in the region and covered as many as 135 million beneficiaries. In this paper, we use administrative and household survey data to document (i) the evolution of CCTs and poverty in LAC, (ii) the relationship between expanded coverage and the quality of targeting and (iii) the change in beneficiary household characteristics. We show that in most countries the transfers represent over 20% of poor beneficiaries’ incomes, and the poverty headcount index would be on average 13% higher, had CCTs not been implemented. A decade of sustained and widespread economic growth has expanded the fiscal space for social assistance. The largest programs (in Brazil, Colombia and Mexico) have achieved coverage rates around 50-55% of the poor. At the same time, economic growth contributed to reducing the incidence of poverty. As a result, the number of CCT beneficiaries overtook the number of poor in the region in 2006 (using a standardized income poverty line of USD 2.5 per day (purchasing-power-parity adjusted)). Higher coverage was accompanied by increasing levels of leakage. For example, the share of non-poor beneficiaries increased from 46% to 65% in Ecuador over the period 2004-10 and from 40% to 61% in Mexico over the period 2002-10. Beneficiaries’ level of education and participation in formal labor markets have increased. Yet, the analysis of household data shows that CCT beneficiaries remain mostly poor or vulnerable, characterized by extremely low levels of schooling and unstable labor market outcomes. Hence, while further expansion of the programs may in many cases be unnecessary, the need for social assistance and human capital development remains high. The transition to the new generation of CCT programs will require focusing on the quality of the services that accompany the transfers, in order to maximize the impact on current and future poverty.

Suggested Citation

  • Stampini, Marco & Tornarolli, Leopoldo, 2012. "The Growth of Conditional Cash Transfers in Latin America and the Caribbean: Did They Go Too Far?," IZA Policy Papers 49, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izapps:pp49

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    References listed on IDEAS

    1. Barrientos, Armando & Nino-Zarazua, Miguel, 2010. "Social Assistance in Developing Countries Database Version 5.0," MPRA Paper 20001, University Library of Munich, Germany.
    2. Fabio Veras Soares & Sergei Soares & Marcelo Medeiros & Rafael Guerreiro Osório, 2006. "Programas de Transferência de Renda no Brasil: impactos sobre a desigualdade," Discussion Papers 1228, Instituto de Pesquisa Econômica Aplicada - IPEA.
    3. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications, The World Bank, number 2597.
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    Cited by:

    1. López Mourelo, Elva & Escudero, Verónica, 2017. "Effectiveness of Active Labor Market Tools in Conditional Cash Transfers Programs: Evidence for Argentina," World Development, Elsevier, vol. 94(C), pages 422-447.
    2. Alejandro Bonvecchi & José Henríquez & Julia Johannsen & Natasha Morales & Carlos Scartascini, 2015. "¿Quiénes deciden la política social? Economía política de programas sociales en América Latina," IDB Publications (Books), Inter-American Development Bank, number 90183 edited by Alejandro Bonvecchi & Julia Johannsen & Carlos Scartascini, February.
    3. repec:eee:wdevel:v:107:y:2018:i:c:p:98-110 is not listed on IDEAS
    4. Carter, Patrick, 2014. "Aid allocation rules," European Economic Review, Elsevier, vol. 71(C), pages 132-151.
    5. Guido Neidhöfer & Miguel Niño-Zarazúa, 2017. "The long(er)-term impacts of Chile Solidario on human capital and labour income," WIDER Working Paper Series 201, World Institute for Development Economic Research (UNU-WIDER).
    6. Teresa Molina-Millan & Tania Barham & Karen Macours & John A. Maluccio & Marco Stampini, 2016. "Long-term Impacts of Conditional Cash Transfers in Latin America: Review of the Evidence," IDB Publications (Working Papers) 7891, Inter-American Development Bank.
    7. repec:idb:idbbks:7065 is not listed on IDEAS
    8. Trivelli, C. & Clausen, J. & Vargas, S., 2017. "IFAD RESEARCH SERIES 9 - Social protection and inclusive rural transformation," IFAD Research Series 280047, International Fund for Agricultural Development (IFAD).
    9. repec:bla:devpol:v:36:y:2018:i:4:p:445-464 is not listed on IDEAS
    10. Lina Salazar & Julián Aramburu & Mario González & Paul Winters, 2015. "Food Security and Productivity: Impacts of Technology Adoption in Small Subsistence Farmers in Bolivia," IDB Publications (Working Papers) 87853, Inter-American Development Bank.
    11. Verónica Amarante & Martín Brun, 2018. "Cash Transfers in Latin America: Effects on Poverty and Redistribution," ECONOMIA JOURNAL, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA, vol. 0(Fall 2018), pages 1-31, November.
    12. World Bank Group, 2017. "Republic of Congo Poverty Assessment Report," World Bank Other Operational Studies 28302, The World Bank.
    13. Sebastian Martinez & Pablo Celhay & Cecilia Vidal & Julia Johannsen, 2017. "Paying Patients for Prenatal Care: The Effect of a Small Cash Transfer on Stillbirths and Survival," IDB Publications (Working Papers) 8475, Inter-American Development Bank.
    14. Evridiki Tsounta & Anayochukwu Osueke, 2014. "What is Behind Latin America’s Declining Income Inequality?," IMF Working Papers 14/124, International Monetary Fund.
    15. LaGarda, Guillermo & Gallagher, Kevin & Linares, Jennifer, 2016. "Capital Openness and Income Inequality: A Cross-Country Study and The Role of CCT in Latin America," MPRA Paper 74181, University Library of Munich, Germany.
    16. Pedro Mendes Loureiro, 2016. "Reformism, Class Conciliation And The Pink Tide: Prospects For The Working Classes Under Left-Of-Centre Governments In Latin America," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 020, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    17. Akresh, Richard & de Walque, Damien & Kazianga, Harounan, 2013. "Cash transfers and child schooling : evidence from a randomized evaluation of the role of conditionality," Policy Research Working Paper Series 6340, The World Bank.
    18. Teresa Molina-Millan & Tania Barham & Karen Macours & John A. Maluccio & Marco Stampini, 2016. "Long-term Impacts of Conditional Cash Transfers in Latin America: Review of the Evidence," IDB Publications (Working Papers) 96136, Inter-American Development Bank.
    19. Alfredo Saad-Filho, 2015. "Social Policy for Neoliberalism: The Bolsa Família Programme in Brazil," Development and Change, International Institute of Social Studies, vol. 46(6), pages 1227-1252, November.

    More about this item


    Socio-Economic Database for Latin America and the Caribbean (SEDLAC); beneficiary characteristics; social assistance; leakage; coverage; Latin America and the Caribbean (LAC); Conditional Cash Transfers (CCTs);

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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