Conditional Cash Transfers (CCTs) provide money to poor households who meet program requirements, with over 30 countries implementing such programs. CCTs have improved literacy levels, graduation rates, and reduced child labor incidents. They also reduce infant and maternal mortality rates, but can be difficult to manage and may dictate specific choices.
Conditional Cash Transfers (CCTs) are money that is provided to poor households who meet specific program requirements. These programs exist in over 30 countries, including Brazil, Mexico and Peru. Smaller testing programs of this type have been established in areas of the United States and India.
Many people see conditional money transfers as a substantial improvement to welfare policy. In many cases, the funds provide incentives for parents to take active steps to reduce the conditions that cause poverty in the next generation. As a result, countries with CCT programs that are subject to school enrollment for children have seen dramatic increases in literacy levels and graduation rates. Child labor incidents have also decreased, sometimes forcing companies to hire adults at competitive wages.
Measurable results have also been recorded with conditional cash transfers that reward parents for improving their children’s health. According to a 2008 World Bank article, children in countries with established CCT programs that address nutrition were less likely to suffer growth spurts. These children were healthier than those who did not participate in the program and, as a result, also performed better in school. It is believed that these children will eventually produce a work pool that is both physically and intellectually stronger.
CCT programs also appear to reduce infant and maternal mortality rates. Many of these programs emphasize prenatal education and medical care. Incentives are typically given to pregnant women who regularly visit their doctors and attend nutrition and childcare classes.
While these programs produce noticeable results, they can be difficult to manage. The World Bank, a large private contributor to these programs, reports that up to 20 percent of the funds allocated to conditional cash transfers are to be set aside for administrative costs. Furthermore, these programs are only effective in areas with adequate health and education facilities.
Some opponents of conditional money transfers don’t directly oppose the program but face problems with certain requirements. Parental choices are often substantially influenced by government policy. While it’s almost universally agreed that children should be educated and receive health care, these programs often dictate specific choices that aren’t as widely accepted.
Brazil’s conditional money transfer program, for example, requires all children to be immunized. Parents with legitimate concerns about vaccine safety may be pressured to ignore their concerns in order to receive benefits. Similarly, most CCT programs view public school as the only qualifying educational choice. Those who wish to home-school their children for religious reasons are generally ineligible for conditional money transfers.
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