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A Comparison of the Economics Impacts of Conditional and Unconditional Cash Transfers in Egypt

Author

Listed:
  • Imane Helmy

    (Faculty of Management Technology, German University in Cairo)

  • Christian Richter

    (Faculty of Management Technology, German University in Cairo)

  • Khalid Siddig

    (Faculty of Lif Sciences, Humboldt University in Berlin)

  • Hebatallah Ghoneim

    (Faculty of Management Technology, German University in Cairo)

Abstract

This paper uses a computable general equilibrium model to distinguish between the economy-wide impact of targeting conditional and unconditional cash transfer to Egyptian households following the full removal of subsidies. Analyzing the impact on the middle class whose vulnerability increased during the reform is another addition of this paper that makes an empirical contribution to the literature discussing the effectiveness of cash transfer compared to price subsidies. The STAGE model is calibrated on the Egyptian Social Accounting Matrix 2012/13. The results show that the removal of subsidies will have the largest negative impact on the consumption of middle class. Moreover, Conditional Cash Transfer (CCT) maintains the best policy for mitigating the harmful effect of removing subsidies. It has a positive impact on the demand for labor in education and health sectors where the majority of labor is skilled males and semi-skilled females. Similarly, introducing CCT will boost production in health and education sectors.

Suggested Citation

  • Imane Helmy & Christian Richter & Khalid Siddig & Hebatallah Ghoneim, 2018. "A Comparison of the Economics Impacts of Conditional and Unconditional Cash Transfers in Egypt," Working Papers 50, The German University in Cairo, Faculty of Management Technology.
    • Handle: RePEc:guc:wpaper:50
    as

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    File URL: http://mgt.guc.edu.eg/wpapers/050Helmy_2018.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Subsidies Reform; Conditional Cash Transfer; CGE model;
    All these keywords.

    JEL classification:

    • E16 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Social Accounting Matrix
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy

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