povThe Effect of Cash Transfer Programs on Poverty Reduction

Sergio Alfredo Martinez Cotto

Abstract


The paper aims to set in a global context and examine the impact of Conditional Cash Transfers Programs (CCTP) in the Latin America & the Caribbean (LAC) region. In the context of global commitments to reduce poverty, as it is the case of the 2030 Sustainable Development Goals (SDGs) Agenda, this paper addresses the concerning of evaluating CCTPs as policy instruments. Literature built on empirical evidence at household level across LAC countries suggests that CCTPs have yielded positive and significant effects on poverty reduction, school enrollment, and access to health care services. With data over a panel of 18 LAC countries that started the operation of CCTPs at a given point during the period 1990 – 2013, I found significant effects of CCTPs on outcomes of poverty reduction, education, and health. The results obtained for a panel of LAC countries suggested that an increase of one percentage point of the population coverage of CCTPs was associated on average with a decrease of 0.04 percentage points on the poverty headcount ratio at $1.90 per day. In addition, the CCTPs led an increase of the school enrollment at primary and secondary levels by 0.12 and 0.25 percentage points, respectively. Finally, CCTPs showed to yield positive impacts on improving nutrition conditions and immunization coverage. For instance, CCTPs had an effect on decreasing the prevalence of stunting by 0.26 percentage points and increasing the HepB3 immunization coverage by 0.21 percentage points.

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