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The Impact of Philippines’ Conditional Cash Transfer Program on Consumption

Author

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  • Melba V. Tutor

    (School of Economics, University of the Philippines Diliman)

Abstract

Pantawid Pamilyang Pilipino Program provides cash grants to poor households conditional on pre-determined investments in human capital. This study analyzed its impact on consumption using the 2011 Annual Poverty Indicators Survey. Average treatment effect on the treated (ATT) is estimated through propensity score matching methodology. Heterogeneous impacts are examined among the bottom 20% of income distribution. The study finds that among the total sample, per capita total expenditures is not affected by the program. In per capita monthly terms, only carbohydrates and clothing significantly increased. As expenditure shares, education and clothing registered significant positive impact. No impact is observed on health spending, both in per capita terms and as a share of expenditure. The impact of Pantawid Pamilya on consumption is more pronounced among the poorest fifth of households. Results show that households have responded to program conditionalities but there is very little room to improve consumption of other basic needs. The recent program modification of increasing education grants to older children and covering up to secondary school completion will help households sustain induced behavioral changes over time. Stronger impact on the poorest fifth of households underscores the need to improve the targeting mechanism to address leakage issues.

Suggested Citation

  • Melba V. Tutor, 2014. "The Impact of Philippines’ Conditional Cash Transfer Program on Consumption," UP School of Economics Discussion Papers 201405, University of the Philippines School of Economics.
  • Handle: RePEc:phs:dpaper:201405
    as

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    File URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1458
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    References listed on IDEAS

    as
    1. Galiani, Sebastian & McEwan, Patrick J., 2013. "The heterogeneous impact of conditional cash transfers," Journal of Public Economics, Elsevier, vol. 103(C), pages 85-96.
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    3. Manuela Angelucci & Orazio Attanasio & Vincenzo Di Maro, 2012. "The Impact of Oportunidades on Consumption, Savings and Transfers," Fiscal Studies, Institute for Fiscal Studies, vol. 33(3), pages 305-334, September.
    4. Orazio Attanasio & Alice Mesnard, 2006. "The Impact of a Conditional Cash Transfer Programme on Consumption in Colombia," Fiscal Studies, Institute for Fiscal Studies, vol. 27(4), pages 421-442, December.
    5. Fernando Borraz & Nicolás González, 2009. "Impact of the Uruguayan Conditional Cash Transfer Program," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 46(134), pages 243-271.
    6. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    7. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
    8. Djebbari, Habiba & Smith, Jeffrey, 2008. "Heterogeneous impacts in PROGRESA," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 64-80, July.
    9. Alberto Abadie & Guido W. Imbens, 2008. "On the Failure of the Bootstrap for Matching Estimators," Econometrica, Econometric Society, vol. 76(6), pages 1537-1557, November.
    10. Ana C. Dammert, 2009. "Heterogeneous Impacts of Conditional Cash Transfers: Evidence from Nicaragua," Economic Development and Cultural Change, University of Chicago Press, vol. 58(1), pages 53-83, October.
    11. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," Review of Economic Studies, Oxford University Press, vol. 65(2), pages 261-294.
    12. Juan Jose Diaz & Sudhanshu Handa, 2006. "An Assessment of Propensity Score Matching as a Nonexperimental Impact Estimator: Evidence from Mexico’s PROGRESA Program," Journal of Human Resources, University of Wisconsin Press, vol. 41(2).
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    Cited by:

    1. Stella Luz A. Quimbo & Joseph J. Capuno & Aleli D. Kraft & Rhea Molato & Carlos Tan, Jr., 2015. "Where does the money go? Assessing the expenditure and income effects of the Philippines' Conditional Cash Transfer Program," UP School of Economics Discussion Papers 201502, University of the Philippines School of Economics.

    More about this item

    Keywords

    consumption; CCT; impact evaluation; propensity score matching;

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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