Friday, 6 July 2012

Cash transfers, hand outs or life lines for disadvantaged children

Children left behind by the economy and social fabric face issues which may persist throughout the course of their lives. Investment which addresses disadvantage and inequality experienced in the early years of an individual’s life has significant long term economic and social returns.

Child sensitive social protection measures are important tools for assisting those children left behind as well, mitigating shocks, including economic, social and natural stresses and crises which often have a disproportionate impact on all children. Cash transfers are one social protection measure that have had widespread success, particularly in Latin America and the Caribbean.

A study by the London School of Economics which focused specifically on Uruguay and children's birth outcomes found that participation in a generous cash transfer program contributed to a 15% reduction in the incidence of low birth weight (Amarante V et al, 2011). Further a study by the International Development Bank which focused on a program for young children in Nicaragua, found that cash transfers had a positive effect on child development, specifically regarding their cognitive development, and that there was no 'fade out' of impacts 2 years after the program and the transfers stopped (Macours K et al, 2008).

Interestingly within this project no evidence was found to suggest that child development outcomes were better for households who received larger transfers, however other factors such as the social awareness marketing that accompanied the program and giving the transfers to women were deemed to have significantly contributed to the positive outcomes (Macours K et al, 2008). Another study conducted in Europe also found that with cash transfers, when assessing income poverty scores, the size of the transfer wasn’t the most influential factor and that its design and relevance to context were also of great importance (Social Protection Committee, 2012).

Cash transfers are not perceived as effective strategies the world over. Indeed in some developed and developing country contexts, they are perceived as simple hand outs which nurture dependency. Independent of these opinions, when considered specifically in relation to children who experience disadvantage and inequality, their effectiveness at averting and addressing lifelong damage makes them a worthwhile investment.

Amarante V et al (2011) Do Cash Transfers Improve Birth Outcomes? Evidence from Matched Vital Statistics, Social Security and Program Data, London School of Economics

Macours K et al (2008) Cash Transfers, Behavioural Changes, and the Cognitive Development of Young Children: Evidence from a Randomized Experiment, International Development Bank

Social Protection Committee (2012) SPC Advisory Report to the European Commission on Tackling and Preventing Child Poverty, Promoting Child well-being, European Commission, 27 June 2012

Hannah Chadwick
Wikichild Coordinator

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