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Conditioning Out the Poor? Consumption Inequality and the Design of Cash Transfer Programs

Author

Listed:
  • Santosh Anagol
  • Thomas Fujiwara
  • Martin Navarrete

Abstract

Conditionality can exclude poor households from receiving transfers. Reanalyzing five randomized evaluations of conditional cash transfers (CCTs), we find that 9–37% of eligible recipients fail to meet conditions, and they typically have lower baseline consumption. We assess the welfare implications of budget-neutral shifts from CCTs to unconditional cash transfers. Conditionality exacerbating inequality among eligible recipients can be quantitatively important for welfare impacts. We quantify how large conditionality-induced human capital gains must be for the welfare benefits of CCTs to outweigh the inequality costs generated by conditionality.

Suggested Citation

  • Santosh Anagol & Thomas Fujiwara & Martin Navarrete, 2025. "Conditioning Out the Poor? Consumption Inequality and the Design of Cash Transfer Programs," NBER Working Papers 33841, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33841
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    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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