Human development conditional income transfers:

Origins, theory, impact, challenges

Armando Barrientos, Global Development Institute, University of Manchester

a.barrientos@manchester.ac.uk

Asia-Pacific Social Protection Week, ADB Headquarters, Manila, 1-5 August 2016

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DISCLAIMER: This presentation does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for
its contents.

Origins
Two pioneers: Brazil's Bolsa Escola (1995) and Mexico's Progresa (1997)
Progresa focused on rural poverty, particularly intergenerational poverty persistence,
and emerged against a context of clientelistic antipoverty programmes
key insight: the need to combine income transfers and basic services
'giving the poor access to more food may satisfy only the needs of the parasites
lodged in their stomachs'*
Bolsa Escola origins in municipal initiatives mitigating the impact of economic crisis on
poor households - children schooling, health and nutrition
key insight: income transfers are not enough, human development is essential
to address intergenerational poverty persistence
1997 Federal government offers counterpart funding to poorer municipalities;
in 2001 it becomes a federal programme; in 2003 it becomes Bolsa Famlia
*Levy, S. (2006). Progress against Poverty. Sustaining Mexicos Progresa-Oportunidades Program. Washington DC: Brookings Institution Press.
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Reach of Human Development Income Transfer Programmes in Latin America

(millions)

Data Source: Stampini and

Tornarolli [2012]

128.82

91.39

96.81

135.37

101.92

82.23
74.76
66.33

25% of
population

45.76
38.27

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

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Diversity in programme design

Combine income transfers with access to services building human development,
especially among children
Family transfer + Child transfers [variable according to age or grade]
...early restrictions on total transfer/# of children [prevent pro-natalist incentives]
Transfer are guaranteed for a period of time [subject to re-certification and compliance
with programme conditions]
Conditions: school enrolment and attendance, health care utilisation [expectant mothers,
infants, immunisation, health checks], and nutrition training

Co-responsibilities require coordination among public agencies, centralised

information on vulnerable households, impact evaluations
Focused on population in extreme poverty, but expanded to cover population in
poverty, and population vulnerable to poverty
Programmes are rules-based and citizenship-based, a break with clientelistic practices
(asistencialismo); but nevertheless generate electoral support for incumbents
Low budgets: 0.5% of GDP and measurable impact
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Theory
Focus on human capital/human development
Households in poverty are unable to make sufficient investment in education and
health care for their children, resulting in intergenerational poverty persistence
Imperfect altruism and credit constraints

Schooling externalities - household decision making based on private benefits ignores

broader benefits to society

Transfers improve current consumption but also facilitate household investment in

children's schooling and health care
Conditions ensure households invest in schooling and health care

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other goods and services

c
a

f
e

schooling
h

Household choice between schooling and other goods (child labour): Initially a-b is budget constraint and
household is at point e. With a transfer household income moves to c-d. It can now 'consume' more of other
goods keeping schooling constant f or more schooling keeping other goods constant, or any point between f
and g. With a condition of minimum schooling at h, the household chooses g to meet the condition.

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Short-run impact on consumption poverty

Difference in difference estimates of the poverty reduction effectiveness
of Progresa/Oportunidades in Mexico two years after its introduction
Poverty reduction (%) 1997-1999

50

45.63

45
40

36.13

35
30
25
20

17.36

15
10
5
0

Poverty headcount

Poverty gap

Poverty gap squared

Data source: Skoufias, E. 2005. Progresa and Its Impacts on the Welfare of Rural Households
in Mexico, Washington: International Food Policy Research Institute

As a rough rule of thumb, HDCIT participants consume 80% of the value of transfers
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Medium run impact on human development (nutrition)

Difference in height for age between OPORTUNIDADES treatment (joined
1998) and control (joined 2000) groups in 2000 and 2003 for 2-6 year olds
difference (cm)
1

0.65

height for age after 2 years

height for age after 6 years

Gertler and Fernald [2006] Vol III ch. 2 Impacto de mediano plazo del programa
Oportunidades sobre el desarrollo infantil en areas rurales

Taller individuals earn more in the labour market

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Do schooling conditions work?

Baird, S., Ferreira, F., Ozler, B., & Woolcock, M. (2013). Relative effectiveness of conditional and unconditional cash transfers for schooling outcomes in developing countries: A systematic
review (Campbell Systematic Reviews No. 2013:8). Oslo: The Campbell Collaboration. DOI: 10.4073/csr.2013.8

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Transfers reduce child labour but not proportionally to the value of the transfer

Child labour reduction and value of the transfer

Bono
desarrollo
Humano
(Ecuador)

0.18

Reduction in Child Labour

0.16
0.14
0.12

CSG (S. Africa)

0.1
SCT (Malawi)

0.08

0.06
0.04
0.02

PRAF
(Honduras)

0
0

RPS
(Nicaragua)

Tekopora
(Paraguay)

Oportunidades
(Mexico)

Familias Accion
(Colombia)
PATH (Jamaica)
10

15

20

25

30

Value of the transfer / month

Note: Data from Barrientos et al (2010) and de Hoop and Furio (2012)

Transfers act on a threefold division of child time: schooling, work, play

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Employment effects of transfers differ across adults and households

Studies on aggregate adult labour supply effects of transfer receipt often find notsignificant or very marginal effects
But where disaggregated by gender and household composition, labour force
participation effects of transfer receipt are stronger and heterogeneous
Regression Discontinuity Design: Colombias Familias en Accin
Assignment through a proxy means test
2007 extended to large cities
2010 outcomes using 2006 welfare scores

Males 21+
Females 21+
One female adult plus
children aged 0-6

LFP
0.023
n.s.
0.061

s.e.
0.008
0.013

The key insight from available studies suggest that employment effects reflect a re-allocation of
household labour resources in response to the transfer
Barrientos, Armando, and Juan M. Villa. 2015a. Antipoverty Transfers and Labour Force Participation Effects. Journal of Development Studies 51 (9):
122440.
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Challenges - Exit
Initially, most human development transfer programmes tested for exit conditions
through a process of recertification, in which entry conditions were re-applied
... but this is problematic where households exiting a programme fall back into poverty
Protection versus promotion/prevention objectives
Protection objectives imply minimising leakages to non-poor households
Prevention/promotion objectives justify support for non-poor households if this
support prevents them from falling into poverty
Using entry conditions as exit conditions is not appropriate in human development
transfer programmes combining protection and promotion objectives
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Colombia's Familias en Accion dropped 60,000 households in 2007 following recertification as these households had welfare scores above the entry threshold
Observed 2010/11 outcomes among households on the margins of eligibility in 2007
show negative human
capital accumulation
outcomes (school
attendance and school
years completed) and on
labour force participation
of mothers
Strategies?
Fixed length participation
Reduced support after exit
Economic inclusion

Villa, J. M., & Barrientos, A. (2016). Entry as exit in antipoverty programmes (Working Paper No. 2016-002). Manchester: University of Manchester.
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Challenges - Politically sustainability and policy-to-politics feedback effects?

J. Mahon [2009:4] contemporary efforts to extend non-contributory programs to the
poor fall short in an important regard: they do not create a stable distribution
coalitionPeople do not become beneficiaries by becoming members of anything
Findings from the emerging literature on the politics of human development transfer
programmes in Latin America:
Programme participation facilitates political inclusion: increases in participant
registration and turnout
Electoral support for incumbents, no evidence they are clientistic, or left-leaning
So far attitudinal surveys find broad-based support for programmes

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...but what about 'commitment' as the main feedback effect from HDCITs?
Table 1 Programme participation and support for incumbent and for political institutions
Data from LAPOP2010/2012/2014
Whether support incumbent
Respect for political institutions
Variables
Coefficient
Marg. Effects
mean (sd)
Coefficient
Marg. Effects
mean (sd)
Participant =1
Constant

0.2418***
(0.0218)
-1.6474***
(0.0505)

0.0779***
(0.00697)

0.197
(0.398)

0.0792***
(0.0201)
-1.2506***
(0.0456)

0.0282***
(0.00717)

0.193
(0.395)

Observations
R-squared

25,518
28,532
0.137
0.0467
Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1
Controls include education, sex, rural, victimisation, corruption, unemployment, change in the economy and in
personal economic situation, wealth index; and variables capturing attitudes to the state and perception of
government effectiveness. Dependent variable: respect for political institutions is 6/7 on Lickert scale.

Attitudinal survey data for Latin America show that beneficiaries of human development
transfers have greater support incumbents than non-beneficiaries
... and show stronger support for political institutions

Barrientos, A. (2016). What is the future of human development income transfers in Latin America? (Mimeo). Manchester: Global Development Institute,
University of Manchester.
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Conclusions
Human development conditional income transfers are a significant innovation in
global antipoverty policy combining income transfers and services to support
improvement in the productive capacity of households
Their expansion in Latin America is intended to address intergenerational poverty
persistence through improvements in children's schooling, health and nutrition
They show a diversity of design and implementation, and outcomes
Challenges remain: among them, institutionalisation, exit strategies, and political
sustainability

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