Conditional cash transfers (CCTs) provide cash to poor households who meet specific program requirements. CCT programs have led to increased literacy rates, reduced child labor, and improved health outcomes. However, they can be difficult to manage and may limit parental choices.
Conditional cash transfers (CCTs) are cash that are 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 cash transfers as a substantial improvement in welfare policy. In many cases, the money encourages parents to take active steps to reduce conditions that cause poverty in the next generation. As a result, countries with CCT programs conditional on children’s school enrollment have seen dramatic increases in literacy levels and graduation rates. Incidents of child labor have also declined, 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 well-established CCT programs that address nutrition were less likely to experience stunted growth. These children were healthier than those who did not participate in the program and, as a result, they also performed better in school. These children are believed to eventually produce a stronger pool of work, both physically and intellectually.
CCT programs also appear to reduce infant and maternal mortality rates. Many of these programs emphasize prenatal education and medical care. Incentives are often offered to pregnant women who see their doctors regularly and attend classes in nutrition and child care.
While these programs produce obvious results, they can be difficult to manage. The World Bank, a large private contributor to these programs, reports that up to 20% of the money earmarked for conditional cash transfers must be set aside for administrative costs. Furthermore, these programs are only effective in areas with adequate educational and health facilities.
Some opponents of conditional cash transfers do not directly oppose the program, but face certain requirements. Parental choices are often substantially influenced by government policy. While it is almost universally accepted that children should be educated and receive health care, these programs often dictate specific choices that are not as widely accepted.
Brazil’s conditional cash transfer program, for example, requires that all children be immunized. Parents with legitimate concerns about vaccine safety may be pressured to ignore their concerns about receiving benefits. Likewise, most TCR programs treat public school as the only qualified educational option. Those who wish to homeschool their children for religious reasons are generally ineligible for conditional cash transfers.
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