Conditional Cash Transfers for the Poor

In an interesting online series called „Fixes“ the NYTimes showcases existing „solutions to social problems and why they work“. A recent post starting with an example of Brazil got me interested, maybe because I’ll be there this year. Also, the ever-present topic of how to help poor people in our own countries and abroad seems to be especially intensely debated these days, both in the US and in Germany.

What I didn’t know is that with Brazil and Mexico, two rather big newly industrializing countries are implementing on a large scale programs that transfer cash to the extremely poor, on conditions that mostly center around caring for your and your children’s health and education. And they seem to do a surprisingly great job at reducing poverty:

Today, however, Brazil’s level of economic inequality is dropping at a faster rate than that of almost any other country. Between 2003 and 2009, the income of poor Brazilians has grown seven times as much as the income of rich Brazilians. Poverty has fallen during that time from 22 percent of the population to 7 percent.

Contrast this with the United States, where from 1980 to 2005, more than four-fifths of the increase in Americans’ income went to the top 1 percent of earners.

The scientific evidence linking positive developments in the countries to these programs seem to be sound, even though I didn’t have time to search or read any primary literature:

The idea’s other purpose — to give children more education and better health — is longer term and harder to measure. But measured it is — Oportunidades is probably the most-studied social program on the planet. The program has an evaluation unit and publishes all data. There have also been hundreds of studies by independent academics. The research indicates that conditional cash transfer programs in Mexico and Brazil do keep people healthier, and keep kids in school.

The anecdotic, journalistic evidence sounds very convincing too:

When I traveled in Mexico in 2008 to report on Oportunidades, I met family after family with a distinct before and after story. Parents whose work consisted of using a machete to cut grass had children who, thanks to Oportunidades, had finished high school and were now studying accounting or nursing. Some families had older children who were malnourished as youngsters, but younger children who had always been healthy because Oportunidades had arrived in time to help them eat better. In the city of Venustiano Carranza, in Mexico’s Puebla state, I met Hortensia Alvarez Montes, a 54-year-old widow whose only income came from taking in laundry. Her education stopped in sixth grade, as did that of her first three children. But then came Oportunidades, which kept her two youngest children in school. They were both finishing high school when I visited her. One of them told me she planned to attend college.

For remaining questions, e.g. regarding if these programs can work in even poorer countries and on smaller scale (yes), or in developed countries like the US (maybe), with corrupt and weak governments (pretty good) and if they benefit the surrounding society as well (quite strongly) I highly recommend reading the whole article and also a follow-up article answering readers‘ comments. You also get interesting specifics on the fine-tuning that makes the programs work so well, like this:

There are caps on the benefits, so it does not encourage larger families — in Mexico, for example, three children is the limit. More important, education for girls is the most effective contraceptive. The more educated the mother, the fewer the children.

Datum: Donnerstag, 13. Januar 2011 22:46
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