Should Cash Transfers Be Confined to the Poor? Implications for Poverty and Inequality in Latin America

Should Cash Transfers Be Confined to the Poor? Implications for Poverty and Inequality in Latin America

This paper compares for 13 Latin American countries the poverty and inequality impacts of cash transfer programs that are given to all children and the elderly (that is, "categorical" transfers), to programs of equal budget that are confi...

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Bibliographic Details
Main Authors:	Acosta, Pablo, Leite, Phillipe, Rigolini, Jamele
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ABSOLUTE POVERTY ABSOLUTE POVERTY LINE ADMINISTRATIVE COSTS CARIBBEAN REGION CASH TRANSFER PROGRAM CASH TRANSFER PROGRAMS CASH TRANSFERS CHANGES IN POVERTY COST EFFECTIVENESS COST-EFFECTIVENESS ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC SHOCKS ELDERLY PEOPLE EXTREME POOR HOUSEHOLDS EXTREME POVERTY FAMILIES WITH CHILDREN FAMILY MEMBERS FOOD POLICY GEOGRAPHIC TARGETING GEOGRAPHICAL REGIONS HEALTH INSURANCE HOUSEHOLD HEADS HOUSEHOLD SURVEYS HOUSEHOLDS WITH CHILDREN HUMAN CAPITAL HUMAN DEVELOPMENT IMPACT ON POVERTY INCIDENCE OF POVERTY INCOME INCOME DISTRIBUTION INCOME INEQUALITY INCOME QUINTILE INEQUALITY OLD AGE PARTICIPATION COSTS POLITICAL ECONOMY POOR POOR BENEFICIARIES POOR CHILDREN POOR EDUCATION POOR HOUSEHOLDS POOR PEOPLE POOR VILLAGES POORER FAMILIES POVERTY ALLEVIATION POVERTY ALLEVIATION PROGRAMS POVERTY GAP POVERTY IMPACT POVERTY IMPACTS POVERTY INCIDENCE POVERTY LINE POVERTY RATES POVERTY REDUCTION POVERTY STATUS PUBLIC SPENDING REDUCTION IN POVERTY REMOTE AREAS RURAL RURAL AREAS RURAL HOUSEHOLD RURAL POOR SAFETY NET SAFETY NETS SERVICE DELIVERY SOCIAL ASSISTANCE SOCIAL PROTECTION SOCIAL SAFETY NETS TARGETED INTERVENTIONS TARGETED TRANSFERS TARGETING TARGETING MECHANISMS TAXATION TRANSPARENCY VULNERABLE GROUPS WIDESPREAD POVERTY
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111108083448 http://hdl.handle.net/10986/3642

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Summary:	This paper compares for 13 Latin American countries the poverty and inequality impacts of cash transfer programs that are given to all children and the elderly (that is, "categorical" transfers), to programs of equal budget that are confined to the poor within each population group (that is, "poverty targeted" transfers). The analysis finds that both the incidence of poverty and the depth of the poverty gap are important factors affecting the relative effectiveness of categorical versus poverty targeted transfers. The comparison of transfers to children and the elderly also supports the view that choosing carefully categories of beneficiaries is almost as important as targeting the poor for achieving a high poverty and inequality impact. Overall, the findings suggest that although in the Latin American context poverty targeting tends to deliver higher poverty impacts, there are circumstances under which categorical targeting confined to geographical regions (sometimes called "geographic targeting") may be a valid option to consider. This is particularly the case in low-income countries with widespread pockets of poverty.

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