Exit as entry in antipoverty programmes

Juan M. Villa and Armando Barrientos
2016

Summary

When conditional cash transfer programmes (CCTs) use entry conditions to establish exit criteria, is this consistent with their protection and promotion objectives? This paper explores why this practice it not supported analytically, nor empirically – through an analysis of outcomes for families excluded from Colombia’s Familias en Accion. It finds that this practice can be associated with welfare losses for some excluded households. While agencies are beginning to implement measures to mitigate negative effects, further research will highlight their relative effectiveness.

It is widely acknowledged that anti-poverty transfers make an important contribution to the reduction of poverty, with CCTs providing income transfers conditional on household investment in human capital, especially schooling and health care. However, literature on CCTs has focused largely on entry conditions, paying little attention to exit conditions or whether entry requirements can be used reliably as exit conditions.

Applying entry conditions as exit conditions ensures that recipients reach a standard of living consistent with meeting basic needs, therefore maximising the poverty reduction of a fixed and insufficient anti-poverty budget. However, as CCTs are concerned with not only protection, but also promotion (that is, preventing households above the poverty line from falling back into poverty and strengthening their productive capacity to ensure a sustainable exit from poverty), using entry conditions to define exit is inadequate.

A scarcity of recent studies mean it is difficult to establish whether the use of entry requirements as exit conditions is empirically a matter of concern. However, this paper estimates a range of outcomes observed in 2011 among households who participated in Colombia’s Familias en Accion programme in 2006, but were subsequently excluded in 2007.

  • Effects on schooling: children from families at the margins of eligibility in 2006 and excluded in 2007 show lower attendance. This effect is quite small, relative to the high attendance rates in the sample, however cumulative effects appear to be more significant, particularly for boys (comparative to girls), and for older children (comparative to younger children).
  • Effects on labour force participation: There is a small negative difference in labour force participation in 2011 for households who had been at the threshold of 2006 eligibility.  Other effects include a reduction in formal employment. Sex-disaggregation shows higher participation among excluded male participants. For females excluded from the programme, lower participation rates are likely to reflect a net effect from the income shortfall and a reduction in school attendance among children of school age and/or reduced capacity to afford childcare for children below school age.
  • Effects on households’ socio-economic status: excluded households in 2007 are more likely to be eligible in 2011 than households at the margins of eligibility who remained in the programme. This is more acute in rural areas.

Agencies implementing conditional cash transfer programmes are paying increasing attention to exit conditions and have adopted a range of strategies to address this issue. Innovations include: guaranteeing the receipt of transfers for a specified period of time following changes in socio-economic conditions of participant households; reduced level of transfers for households exiting programmes but remaining vulnerable to poverty; and strategies to improve the employability of exiting households.

Source

Villa, J.M. and Barrientos, A. (2016). Exit as entry in antipoverty programmes. GDI Working Paper 2. Manchester, UK: The University of Manchester.