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Cash transfers in Latin America: effects on poverty and redistribution

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  • Amarante, Verónica
  • Brun, Martín

Abstract

We present comparative evidence for eight Latin American countries regarding the design and effects of cash transfers (CTs). On the basis of household survey data, we analyze their coverage, importance in household income, and effects on poverty reduction and income redistribution. We present a static microsimulation to analyze the potential impacts of alternative program designs, including perfect targeting and higher budgets. Our results illustrate wide variation in terms of design, coverage, and importance in household income. CTs account for a significant portion of household income in lower deciles. Nonetheless, their effects in terms of reducing the incidence, intensity, and severity of poverty are moderate at best, and although their progressivity is high, their redistributive impact is limited. These results are mainly explained by the meager resources involved. Even under perfect targeting, the budgets allocated would be insufficient to achieve full coverage among households in the lowest part of the income distribution.

Suggested Citation

  • Amarante, Verónica & Brun, Martín, 2018. "Cash transfers in Latin America: effects on poverty and redistribution," LSE Research Online Documents on Economics 123242, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:123242
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    File URL: http://eprints.lse.ac.uk/123242/
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    4. Ivone Perazzo & Analía Rivero & Andrea Vigorito, 2021. "¿Qué sabemos sobre los programas de transferencias no contributivas en Uruguay? Una síntesis de resultados de investigación disponibles sobre el PANES, AFAM-PE y TUS," Documentos de Trabajo (working papers) 21-33, Instituto de Economía - IECON.
    5. Qilin Liu & Qianqian Li, 2023. "Impact of New Rural Pension Insurance on Farmers’ Agricultural Mechanization Service Inputs," Sustainability, MDPI, vol. 15(2), pages 1-18, January.
    6. Perova,Elizaveta & Johnson,Erik Caldwell & Mannava,Aneesh & Reynolds,Sarah Anne & Teman,Alana Hinda, 2021. "Public Work Programs and Gender-Based Violence : Evidence from Lao PDR," Policy Research Working Paper Series 9691, The World Bank.
    7. Villatoro S., Pablo & Cecchini, Simone & Mancero, Xavier, 2021. "The impact of non-contributory cash transfers on poverty in Latin America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.

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    More about this item

    Keywords

    cash transfers; Latin America; poverty; inequality;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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