Publication:
The Targeting Benefit of Conditional Cash Transfers

Loading...
Thumbnail Image
Files in English
English PDF (1004.46 KB)
877 downloads
English Text (239.45 KB)
40 downloads
Date
2020-01
ISSN
Published
2020-01
Abstract
Conditional cash transfers (CCTs) are a popular type of social welfare program that make payments to households conditional on human capital investments in children. Compared to unconditional cash transfers (UCTs), CCTs may exclude some low-income households as access is tied to normal investments in children. This paper argues that conditionalities on children's school enrollment offer an unexplored targeting benefit over UCTs: CCTs target money to households that forgo a discrete amount of child income. This paper shows that the size of this targeting benefit is directly related to the distribution of parental incomes, the size of forgone child incomes, and two elasticities already popular in the literature: the income effect of a UCT and the price effect of a CCT. These elasticities are estimated for a large CCT program in rural Mexico, Progresa, using variation in transfers to younger siblings to identify income effects. In this setting, the analysis finds that the targeting benefit is almost as large as the cost of excluding some low-income households; this implies that 41 percent of the Progresa budget should go to a CCT over a UCT based on targeting grounds alone.
Link to Data Set
Citation
Bergstrom, Katy; Dodds, William. 2020. The Targeting Benefit of Conditional Cash Transfers. Policy Research Working Paper;No. 9101. © World Bank, Washington, DC. http://hdl.handle.net/10986/33150 License: CC BY 3.0 IGO.
Report Series
Report Series
Other publications in this report series
  • Publication
    Do Disasters Always Increase Intimate Partner Violence? Evidence from the 2018 Earthquake in Papua New Guinea
    (Washington, DC: World Bank, 2024-06-12) Leng, Alyssa; Tandon, Sharad
    This paper examines how an earthquake in Papua New Guinea changed people’s attitudes about and the prevalence of intimate partner violence. Although there are several reasons why disasters can aggravate intimate partner violence, among men in disaster-affected regions, the acceptability of intimate partner violence declined significantly. There was a smaller and noisier decline in reported incidents of intimate partner violence, driven by declines among women, who are the least likely to underreport intimate partner violence. The results highlight that the responsibilities of household members and social norms can change in sufficiently turbulent disasters, which can lead to improvements, and that measurement issues need to be better addressed to improve understanding of intimate partner violence.
  • Publication
    The World Bank’s New Inequality Indicator
    (Washington, DC: World Bank, 2024-06-11) Haddad, Cameron Nadim; Mahler, Daniel Gerszon; Diaz-Bonilla, Carolina; Hill, Ruth; Lakner, Christoph; Lara Ibarra, Gabriel
    The World Bank recently introduced a new key indicator to guide its work: the number of countries with high inequality, defined as a Gini index above 40. The new indicator was introduced as part of the new World Bank vision of ending poverty on a livable planet. This paper reviews why reducing inequality matters for ending poverty on a livable planet, summarizes the advantages and disadvantages of using the Gini index to track inequality, outlines challenges in measuring inequality, and discusses what a Gini threshold of 40 implies. Using the most recent data for every country, 52 countries of a total of 169 countries are classified as high inequality countries, which represents a decline from 74 countries at the beginning of the millennium.
  • Publication
    How Much of Economic Growth Trickles Down to the Population in Resource-Rich Countries? Evidence from Papua New Guinea
    (Washington, DC: World Bank, 2024-06-11) Baxi, Paripoorna; Naidoo, Darian; Tandon, Sharad
    There was substantial growth in the resource sector in Papua New Guinea during the last resource boom, increased revenue collection by the government associated with that growth, and significant increases in international assistance, all which might have translated into improved well-being outcomes across the country. For a better understanding of whether these changes improved household-level outcomes, this paper updates estimates of key well-being outcomes in the country. The analysis imputes monetary poverty status using nonmonetary indicators in the 2016 –18 Demographic and Health Survey and estimates the World Bank’s Multidimensional Poverty Measure. Despite the country’s significant growth since 2009, monetary poverty and access to several essential services hardly changed, which stands in stark contrast to the substantial improvement across the rest of the world and other comparison regions over the same period. Combined, the results illustrate that it is possible that very little of resource-led growth trickles down to the population and that the link between macroeconomic and microeconomic outcomes is more tenuous in Papua New Guinea than found in other resource-intensive settings.
  • Publication
    Firm Adaptation to Climate Risk in the Developing World
    (Washington, DC: World Bank, 2024-06-11) Grover, Arti; Kahn, Matthew E.
    How firms in the developing world adapt to changes in weather extremes will play a key role in determining their nation’s economic growth. This survey of the recent microeconomics adaptation literature suggests that although firm competitiveness is negatively affected by weather events, firms may bounce back better under certain conditions. The adaptation and resilience of firms to climate change depend on their capabilities, the available information on risks, and the depth of insurance and financial markets. As real-time weather forecasting improves, firms are better informed about these risks and this affects their decisions regarding their location, production, and configuration of supply chains. A firm’s resilience also depends on the quality of public investment in infrastructure and the social safety net. Understanding that market frictions can slow the pace of adaptation, the paper concludes with some insights on the options available to policy makers.
  • Publication
    Barrier or Opportunity? How Trade Regulations Shape Colombian Firms’ Export Strategies
    (Washington, DC: World Bank, 2024-06-06) Rosenow, Samuel
    Firms increasingly must contend with trade regulations to access foreign markets. This paper quantifies the relative importance of trade regulations and their heterogeneous effects for Colombian firms exporting to Latin America between 2007 and 2017, focusing on specific types and channels. Using panel evidence from a firm-level gravity model with a difference-in-differences identification strategy, technical barriers to trade and quantity control measures both decrease trade on average. Other non-tariff measures and tariffs play a minor role. The technical barriers to trade and quantity measures reallocate trade from small to big firms. The same mechanism benefits firms participating in global value chains. However, quantity controls make it more likely that big firms will leave export markets to the benefit of smaller ones. The results control for the endogeneity of trade regulations and are robust to the use of different samples and measures of firm size.
Journal
Journal Volume
Journal Issue
Associated URLs
Associated content
Citations