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Pay the Poor: Good Results in Brazil and Mexico

Why, oh why would any decent citizen support redistributing income? It's socialism! It's fostering dependency of the poor! It's... it's...

...staggeringly successful at fighting income inequality, poverty, illiteracy, and disease. In 40 countries, conditional cash transfer programs give money to poor people for meeting certain obligations: e.g., keeping kids in school, getting health checkups, attending nutrition workshops. The money usually goes to women, since women almost universally are less likely to do stupid things like buying beer and more likely to spend the money on their families.

Mexico does conditional cash transfers with its Oportunidades progam. Brazil has Bolsa Familia. The results:

In Mexico today, malnutrition, anemia and stunting have dropped, as have incidences of childhood and adult illnesses. Maternal and infant deaths have been reduced. Contraceptive use in rural areas has risen and teen pregnancy has declined. But the most dramatic effects are visible in education. Children in Oportunidades repeat fewer grades and stay in school longer. Child labor has dropped. In rural areas, the percentage of children entering middle school has risen 42 percent. High school inscription in rural areas has risen by a whopping 85 percent. The strongest effects on education are found in families where the mothers have the lowest schooling levels. Indigenous Mexicans have particularly benefited, staying in school longer.

Bolsa Familia is having a similar impact in Brazil. One recent study found that it increases school attendance and advancement — particularly in the northeast, the region of Brazil where school attendance is lowest, and particularly for older girls, who are at greatest risk of dropping out. The study also found that Bolsa has improved child weight, vaccination rates and use of pre-natal care [Tina Rosenberg, "To Beat Back Poverty, Pay the Poor," New York Times: Opinionator, 2011.01.03].

Less teen pregnancy, better pre-natal care, fewer moms and babies dying... sounds pretty pro-life, doesn't it?

Locally, economic development focuses on trickle-down methods. In Madison, conditional cash transfers go to folks already at the top of the economic pyramid. Instead of feeding steak to the sharks, perhaps Heartland, the LAIC, and other Madison benefactors should sprinkle ground beef to the shrimp for engaging in positive social activities.

One Comment

  1. Roger Beranek 2011.01.05

    Bolsa Familia and Oportunidades require parents to send their kids to school and have them vaccinated as a condition of paying them more that those kids could earn. So the program works primarily because it uses a conditional incentive, not because of the redistributive socialist aspect. (It would work just as well if it was done by a non-profit and then it wouldn't involve the government abuse of power) It is an obvious cause for the jump in education and child health. Pointing at it as the reason for any substantive economic improvements is doubtful at this point, but certainly likely. I dislike it only because of the government involvement, otherwise it's a great idea.

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