Policy Instrument:
Definition
Cash transfers that are paid regularly to a family member (for example, the children's mother). Payment, or at least part of the payment, is linked to compliance with conditionalities by families (e.g., prenatal care and child immunization/growth monitoring; school attendance), underpinned by the government’s responsibility to provide the relevant services. Benefit values may vary with the demographic structure of the family.
Rationale
Conditional cash transfers (CCTs) can help reduce immediate poverty and vulnerability while promoting investments in human capital and access to essential services, thereby supporting longer-term social and economic inclusion.
Key features
CCT programmes may have hard conditions, soft conditions, or a combination of both. While hard conditions involve strict payments stoppages or penalties for non-compliance, soft conditions typically trigger follow-up measures, such as reminders, counselling, home visits, or closer caseworker support, rather than sanctions or payment restrictions.
Eligible families are often identified through social registries or other instruments with detailed data. This information allows for different targeting mechanisms to “proxy” poverty or vulnerability to adverse outcomes like food security or malnutrition and in some cases, beneficiaries may also be selected through categorical targeting (e.g. all children under 2, or pregnant women).
CCTs can be linked to complementary programmes and services, often leveraging information from social registries, income reports, and household surveys, alongside support from social assistance or welfare workers.
Ideally, CCTs are anchored in legislation, enabling governments to uphold legal obligations toward citizens (e.g., the right to a life with dignity, free of hunger; protecting poor and vulnerable groups, particularly children).
Extreme poor, poor and/or vulnerable families, particularly those with children.
Overview
A large body of evidence from low- and middle-income countries shows that conditional cash transfers (CCTs) reduce poverty and smooth consumption while supporting investments in children’s human capital (Fiszbein and Schady, 2009).
CCTs are consistently associated with improved household welfare (e.g., consumption, food security) and with increased use of education and preventive health services, although impacts depend on program design and the availability and quality of services (Bastagli et al., 2016).
On education outcomes, a meta-analysis covering multiple CCTs in developing countries finds average increases in school enrolment of 5.1 percentage points in primary and 6.0 percentage points in secondary, with average increases in attendance of 2.5 percentage points (primary) and 8.0 percentage points (secondary); it also finds average reductions in dropout of 1 percentage point (primary) and 4 percentage points (secondary) (Saavedra and Garcia, 2012).
On health and nutrition, a systematic review of CCTs for health-service uptake finds that CCTs can increase the use of preventive services (e.g., clinic visits, immunisation), with larger effects when supply-side constraints are addressed (Lagarde et al., 2007).
Overall, the evidence suggests that CCTs are most effective when they combine clear eligibility and conditionality rules, reliable payments, strong grievance and monitoring systems, and adequate service availability in education and health (Bastagli et al., 2016; Fiszbein and Schady, 2009).
Evidence from selected countries
Brazil
Poverty and inequality: Using national household survey data and administrative information, de Souza and Osorio (2019) assess Bolsa Família’s first 15 years. They estimate that the programme reduced poverty and extreme poverty by about 1–1.5 percentage points, and that it accounted for nearly 10% of the Gini decrease between 2001 and 2015.
Health and nutrition: Rasella et al. (2021) link Bolsa Família coverage to reductions in maternal mortality. Findings indicate that effects are notably stronger among poor mothers exposed to the programme during childhood and adolescence, suggesting a clear intergenerational benefit.
Gender empowerment: Drawing on qualitative studies, Bartholo (2016) concludes that Bolsa Família can strengthen women’s autonomy and improve state-citizen relations.
Labour market, local economy, and exits: Mendes et al. (2024) estimate a local transfer multiplier of approximately 2, meaning that every BRL 1 transferred generates a relative increase of BRL 2 in local output, with the effect persisting for several years.
Egypt
Two rounds of impact evaluation of the Takaful and Karama programmes find positive impacts on household welfare and children’s outcomes. The first round found that the Takaful component increased beneficiary consumption by about 7.3–8.4% and increased monthly food consumption by 8.3–8.9%; it also found increased school-related spending (Breisinger et al., 2018).
In the second-round report, El Enbaby et al. (2022) find that beneficiary households own more assets (including productive and livestock assets) and report higher school enrolment for children, with particularly large gains at preparatory level: children of preparatory-school age were 21 percentage points more likely to be enrolled.
Colombia
Evaluations of Familias en Acción find improvements in schooling outcomes. Orazio Attanasio et al. (2010) report that the programme increased school enrolment for 14–17-year-old children by about 5–7 percentage points (and for 8–13-year-olds by about 1–3 percentage points), and that domestic work participation fell by around 10–13 percentage points in some groups.
References
Attanasio, O., Fitzsimons, E., Gómez, A., Gutiérrez, M. I., Meghir, C., & Mesnard, A. (2010). Children’s schooling and work in the presence of a conditional cash transfer program in rural Colombia. Available at: https://openaccess.city.ac.uk/id/eprint/5381/1/Child_Education.pdf
Bartholo, L. (2016). Bolsa Família and women’s autonomy. Available at: https://www.ipc-undp.org/pub/eng/OP311_Bolsa_Familia_and_womens_autonomy.pdf
Bastagli, F., Hagen-Zanker, J., Harman, L., Barca, V., Sturge, G., Schmidt, T., & Pellerano, L. (2016). Cash transfers: What does the evidence say? A rigorous review of programme impact and of the role of design and implementation features. Available at: https://odi.org/en/publications/cash-transfers-what-does-the-evidence-say-a-rigorous-review-of-impacts-and-the-role-of-design-and-implementation-features/
El Enbaby, M., Elsabbagh, D., Gilligan, D. O., Karachiwalla, N., Koch, B., Kurdi, S., & others. (2022). Impact Evaluation Report: Egypt’s Takaful Cash Transfer Program – Second Round Report. Available at: https://cgspace.cgiar.org/bitstreams/f3705374-cf47-49bb-ab9b-b3781d287a30/download
Fiszbein, A., & Schady, N. (2009). Conditional Cash Transfers: Reducing Present and Future Poverty. Available at: https://openknowledge.worldbank.org/entities/publication/db93c3fe-1810-5834-a9da-c1386caa0323
Breisinger, C., Gilligan, D., ElDidi, H., El Enbaby, H., Karachiwalla, N., Kassim, Y., Kurdi, S., Jilani, A., Thai, G., Goessinger, K.-Y., Moataz, Y., & Petesch, P. (2018). Impact Evaluation Study for Egypt’s Takaful and Karama Cash Transfer Program. Available at: https://cgspace.cgiar.org/bitstreams/d2995c1d-f3c9-4817-8097-75cdfe481e92/download
Lagarde, M., Haines, A., & Palmer, N. (2007). Conditional cash transfers for improving uptake of health interventions in low- and middle-income countries: a systematic review. Available at: https://pubmed.ncbi.nlm.nih.gov/17954541/
Mendes, R., et al. (2024). Bolsa Família: welfare program or economic stimulus?. Available at: https://frbsf.org/wp-content/uploads/wp2024-02.pdf
Rasella, D., et al. (2021). Long-term impact of a conditional cash transfer programme on maternal mortality: a nationwide analysis of Brazilian longitudinal data. Available at: https://pubmed.ncbi.nlm.nih.gov/34059069/
Saavedra, J., & García, S. (2012). Impacts of conditional cash transfer programs on educational outcomes in developing countries: a meta-analysis. Available at: https://www.rand.org/content/dam/rand/pubs/working_papers/2012/RAND_WR921-1.pdf
- Appropriate targeting mechanism to minimize exclusion and inclusion errors;
- Address supply side bottlenecks hindering access to health, education and social assistance services;
- Conditionalities shall be implemented as empowering tools that support the realization of social rights rather than a punishment tool;
- Ensure proper financing and budgeting;
- Ensure payment regularity to secure that the program can alleviate restrictions on consumption, including in isolated areas or for population groups that are digitally and financially excluded (when digital means are necessary for registration and payment);
- Avoid political utilization of the program and ensure cross-partisan support;
- Clearly communicate the program objectives, eligibility criteria, rules and regulations;
- Ensure social participation and accountability as well as complaints mechanisms;
- Adopt and implement a monitoring and evaluation strategy to address in a timely manner any major problem in the implementation of the program;
- Ensure appropriate measures to avoid strategic behavior from the families that may undermine their right to the labor market;
- Properly address the needs of population groups that require special attention and who are more likely to be excluded due to cultural, social, geographical and economic reasons;
- Integrate the conditional income transfer program into the country's social assistance structure;
- Cross-check program databases with other government databases;
- Create strategies and mechanisms to capture the perception, interests and criticisms of the beneficiary population.
SDG 4 - Quality education
- Target 4.1 - By 2030, ensure that all girls and boys complete free, equitable and quality primary and secondary education leading to relevant and effective learning outcomes.
- Target 4.2 - By 2030, ensure that all girls and boys have access to quality early childhood development, care and pre-primary education so that they are ready for primary education
- Target 4.5 - By 2030, eliminate gender disparities in education and ensure equal access to all levels of education and vocational training for the vulnerable, including persons with disabilities, indigenous peoples and children in vulnerable situations
SDG 5 - Gender equality
- Target 5.2 - Eliminate all forms of violence against all women and girls in the public and private spheres, including trafficking and sexual and other types of exploitation
- Target 5.4 - Recognize and value unpaid care and domestic work through the provision of public services, infrastructure and social protection policies and the promotion of shared responsibility within the household and the family as nationally appropriate
SDG 10 - Reduced inequalities
- Target 10.1 - By 2030, progressively achieve and sustain income growth of the bottom - 40 per cent of the population at a rate higher than the national average
- Universal Declaration of Human Rights
- Sustainable Development Goals
- International Covenant on Economic, Social and Cultural Rights (ICESCR)
- ILO Convention 102 (minimum standards of social security)
- ILO recommendation 202 (social protection floors)
- Convention on the Rights of a Child (CRC) – Art. 26
- CFS Policy Recommendations on Social Protection for Food Security and Nutrition