What are the economic impacts of conditional cash transfer programmes? A systematic review of the evidence.

This review examines whether there is evidence of broader economic impacts associated with cash transfer programmes

Abstract

This review was motivated by a need to know whether there is evidence of broader economic impacts associated with cash transfer programmes. If such evidence is found to be methodologically sound, it would help to offset some of the costs of financing social transfers, thereby easing their fiscal burden and increasing their appeal to policy-makers.

The initial search of the literature was conducted using a number of online databases and search terms and resulted in 1,076 studies, which was narrowed down to a final list of 46 papers.

The structure of the review is as follows: section 2 discusses a number of methodological issues which are relevant to the approach taken to the synthesis; section 3 provides a brief description of the programmes included in the review process; the next sections discuss different categories of economic impacts: section 4 discusses impacts relating to household labour allocation, and section 5 to household expenditure patterns including consumption, savings and investment; section 6 relates to the insurance role of cash transfers, and section 7 to the local economy impacts. Finally, section 8 offers some concluding comments.

Key findings:

  1. The evidence is strong that CCTs could lead to a rise in overall household consumption, increase investment in productive assets, reduce child labour and increase school attendance.
  2. The evidence is mixed as to the impacts on adult labour, with increases in market work by both men and women in some contexts and increases in leisure and domestic work in others.
  3. There is persuasive evidence that CCTs protect household consumption and educational patterns during times of crisis.
  4. There is limited evidence that CCTs have spill-over effects within communities in terms of poverty reduction, increased loans and transfers and household behaviour.
  5. There is no evidence that CCTs lead to inflationary pressure in the local economy.

Citation

Kabeer, N.; Piza, C.; Taylor, L. What are the economic impacts of conditional cash transfer programmes? A systematic review of the evidence. EPPI-Centre, Social Science Research Unit, Institute of Education, University of London, London, UK (2012) iv +59 pp. ISBN 978-1-907345-42-5

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