Margarita Beneke & Amy Angel: Conditional cash transfers and rural development in latin america

Conditional Cash Transfers and Rural Development in Latin America

Country Study: El Salvador

Margarita Beneke de SanfeliúAmy Angel

Please note:

• This is a LONG version of the actual presentation.

• It is intended to provide our discussant with more details about our methodology

• Actual presentation will be shortened to 10 – 12 minutes

• If more information is needed prior to the event, please contact [email protected]

Introduction• This research will try to understand how households react to

the intervention of both Conditidonal Cash Transfers (CCT) and Rural Development Projects (RD), like those promoted by IFAD, compared with being exposed to only one of these interventions.

• We aim to identify synergies and complementarities between both types of interventions.

• If synergies are identified, development projects could be more effective in reducing poverty, and CCT programs could find better 'graduation strategies'.

Project objectives• To describe and understand the mechanisms (at the household

and community levels) through which there exist or could exist synergistic effects between rural development and CCT programs.

• To inform policy makers at the national level and international organizations that provide financing for CCTs and rural development projects, about the potential for synergistic effects between both types of interventions, and to suggest alternative program designs to enhance and exploit these effects.

• To provide feedback and build capacity within IFAD's Country Program Managers and country teams, to take greater advantage of potential synergistic effects between IFAD projects and CCT programs.

Project strategy• COMPONENTS– Technical component: evaluate the effect of having access to

CCT and RD, in terms of use of economic assets, poverty reduction, gender effects and financial inclusion.

– Policy advocacy component : generate lessons and influence policy decisions so that key aspects such as graduation from CCTs or participation in RD projects take advantage of multiplier effects that can enhance impact in reducing poverty and improve resilience of poor rural women and men.

• COUNTRIES– Group 1: Colombia, Peru, El Salvador: primary data collected– Group 2: Mexico, Brazil and Chile: analytical studies with

secondary data, to provide lessons for group 1.• SCIENTIFIC COMMITTEE

Hypothesis• Households that are beneficiaries of CCT programs and are

involved in IFAD-RD projects compared with families that just receive one type of intervention (CCT or IFAD-RD) and with families that do not receive any kind of intervention – Will be more successful the income level of the families or

in a given measure of poverty– Will have greater access to the formal financial markets

financial inclusion indicators.– Women will be more empowered role in household

decisions– Will have better opportunities to allocate and enhance

economic assets productivity of production systems within the household.

Methodology

• Literature review, sistematization of other impact evaluations and surveys

• Document programs (CCT and DR)

• Mixed methods

– Quantitative: Household survey. One round (trying to get “before” info from some other source).

– Qualitative: focus groups and in depth interviews with households, project administrator, and communities

• Dialogue with Policy makers, program administrators, politicians, other groups interested in RD

CCT in El Salvador:Comunidades Solidarias Rurales (CSR)• Cash transfers:– Education bonus (children under 18 without complete

primary school): $15 per month– Health bonus: children under 5 or pregnant women: $15– Mixed bonus: if both conditions are met: $20

• Only one bonus per family• The program is in 100 municipalities: rolling entry by level of

poverty • Important: Af family could join the program only they met

qualifying characteristics at the moment of the “census” • The program involves: “capacitaciones” and opportunities to

socialize

IFAD and MAG RD Programs

• Food Security (FS), for subsistence farmer families. Includes field schools for traditional crop improvement, crop diversification, natural resource management and home health. Uses demonstration families who transfer knowledge and technology to secondary families through demonstration plots and direct training.

• Value Chains (VC), for small and medium commercial farmers and entrepreneurs in handicrafts and rural tourism. Activities include field schools to provide training to farmers and efforts to combine purchases of inputs and marketing of products for greater economies of scale.

Comparison groups

Beneficiarios Otros

A BCCT+DR CCT

AC BC

CCT+DR CCT

C D

DR None

Proyectos DR

Salieron de CSRNo recibe

TMCCom

unid

ades

So

lidar

ias

Rur

ales Recibe TMC

Nunca recibieron

Possible “graduation” strategy

Possible comparison groupsNo. Treatment Comparison Aspect to explore

1 A (CCT+RD) C (RD)The additional effect of being exposed to the two interventions, as opposed to only RD

2 A (CCT+RD) B (CCT)The additional effect of being exposed to the two interventions, as opposed to only CCT

3 A (CCT+RD) D (None)The additional effect of being exposed to the two interventions, as opposed to neither.

4 C (RD) D (None) The effect of being exposed to RD interventions, as opposed to no treatment

5 B (CCT) D (None)The effect of being exposed to CCT interventions, as opposed to no treatment

6 A (CCT+RD) AC (CT + RD)The effect of receiving RD and continuing being “active” in the CCT program vs not receiving CCT

7 AC (CT + RD) BD (CT)

The effect of being exposed to RD after exiting from the CCT program (a “graduation strategy”) as opposed to no treatment after exiting the CCT program

8 AC (CT + RD) C (RD)The effect having participated in CCR and receiving DR as opposed to only particating in DR

Sample frameSample frame constructed combining several sources of info:• Ministry of Agriculture (FS and VC 2010-2013)

• FISDL: – Census conducted prior to the start of CSR in each

community: 2005 to 2009, accordingly. Has info for ALL households in 100 municipalities

– Complete CCT beneficiaries data base

We were able to match 19,342 individuals in 14,184 households

Nombre de archivosn° de registros

Base de Beneficiarios PRODEMOR CENTRAL PAF EP 3,177 Base de Beneficiarios PRODEMOR CENTRAL PAF SAN 14,136 CADENAS_PRODUCTIVAS_PRODEMORO 1,016 SEGURIDAD_ALIMENTARIA_PRODEMORO 14,421 Familias beneficiarias PAF SAN 25,357 Total 58,107

- Listings, different formats; - Listings for some areas not

received on time- No information about future

participants

• The unit of analysis is the household• From the complete sample frame, we eliminated:– Households with more than one CCT participant (5%), so

remaining households would have similar transfer values– Households that exited CCT before 2012– Households that entered a RD program before 2012– Households without at least one child two years younger

or two years older than the limit for CRS at the time of selection into the program (So treatment and control households would be “almost” elegible to receive CCT)

– Households in municipalities without RD programs (so all remaining could potentially participate).

Sample frame (cont…)

• Each observation in the sample frame was classified into one of the groups: A,B,C,D, AC, BD– Comparisons among groups with RD beneficiaries can be

done directly A, C and AC– Comparisons involving groups with and without RD

beneficiaries cannot be done directly (possible selection bias): B, D and BD

• Beneficiaries of FS and VC programs appear to be different in variables in Proxy means test used by CSR (according to descriptive statistics using original “census” data) .

• We used discriminant analysis to classify non-RD beneficiaries into one of the B, D and BD (separating by FS and VC)

Using variables in CCT Proxy means test

Sample selection

• To assign each observation to a treatment a control group for each “strategy” and type (FS or VC)- We used Propensity Score Matching (PSM) for each pair

of treatment and control. We left only those observations in the area of common support

- We only found comparison-pairs that were sufficiently similar for the following strategies:

6,176 hogares en 54 municipios

Sample selection (cont…)

No. Treatment Comparison FS VC1 A (CCT+RD) C (RD) YES YES

2 A (CCT+RD) B (CCT) NO NO

3 A (CCT+RD) D (None) NO NO

4 C (RD) D (None) NO NO

5 B (CCT) D (None) NO NO

6 A (CCT+RD) AC (CT + RD) YES NO

7 AC (CT + RD) BD (CT) YES NO

8 AC (CT + RD) C (RD) YES NO

Sample design

Available observations

Randomlyselected from all available in each group

FS VCA CCT + RD 918 287 1,205 C RD 325 185 510 AC CCT + RD 643 643 BC CCT 3,818 3,818

5,704 472 6,176 Total

RD typeGroup Total

FS VCA CCT + RD 250 287 537 C RD 250 185 435 AC CCT + RD 250 250 BC CCT 250 250

1,000 472 1,472 Total

GroupRD type

Total

Actual Intersection of CCT and RDVC and FS

FS only

Geographical location offinal sample

Similar to:

Field work: 27 Jan- 1 april

FS VCA CCT + RD 241 239 480 C RD 213 152 365 AC CCT + RD 230 230 BC CCT 226 226

910 391 1,301

GroupRD type

Total

Total

Final sample

Survey Questionnaire ModulesA. IdentificationB. Household composition (HC)C. Education (HC)D. Health (HC)E. Ocupation and labor market (W) e.1 Ocuations details (I) (D) e.2 Job searchF. Information about land (PC)G. Agricultural production g.1 Crops (D) g.2 Animales (D) g.3 Equipamiento (CF)H. Associations and social capital h.1 Participation in associations h2. Community relationshipI. Rural Development proyects i.1 Food security i.2 Value chains

J. Housing conditions and assets (PC)K. Remittances and other income (I) (D)L. Food security (Proxy, I)M. Expectations, aspirations and empowement m.1 General perceived self-efficacy m.2 Mood and self-esteem m.3 Locus of control m.4 Aspirations m.5 Decision making (W)N. Delinquency and other security issuesO. Financial services(FI) m.1 Debts m.2 SavingsP. Shocks

CH: Human capitalPC: Physical captalD: Economic DiversificationI: IncomeFI: Financial inclusionW: Rol of women

Qualitative strategy• Stage 1. Before survey (to inform data collection)– Focus groups with:• CSR regional staff• IFAD program coordinators• Field staff RD programs

– Interviews with CSR and RD administrators• Stage 2. After survey (to explain and further explore findings

and possible RD program modifications)– Feedback from survey fieldwork personnel– Focus groups and semi-structured interviews (perceptions

of 106 individuals selected from survey sample)• A, C, AC and BD, to explore the “why” of results)

– Interviews with community leaders– Interviews with CSR and RD staff

Identification strategyFrom survey results we noted:- From the original CSR census (2005 to 2009) to the survey in

2014, there was some household restructuring (some members left CCT households and “took” transfers with them, or new members “brought” transfers to non-CCT households).

- Some households that were identified as beneficiaries of RD programs in the official listings, responded that they were not actual beneficiaries

Identification strategy: Intent to Treat Effect, using single difference with PSM (variables in original census)

First Quantitative Results: In El Salvador, what generates synergy between RD and CCT programs, “cash” or “something else”? Is adding RD a good

“graduation strategy”?Given that: The $ transferred is very small (avg. $15.18 per month, currently

payable $60 every 4 months); amount is the same since 2005 Previous evaluations of CSR showed that women´s empowerment

(mainly in the domestic domain) increased due to “capacitaciones” and opportunities for social interaction provided by the program

We test the (additional) hypothesis that the $ amount is NOT what generates the synergy:

Results [A (CCT + RD)] = Results [AC (CCT + RD)]

If this is the case, then we can test if adding RD after “exiting” CCT program would be a good “graduation strategy”

Results [AC (CCT + RD)] > Results [BD (CCT)]

A (TMC+DR) AC (TMC+DR) BD (TMC) A vs ACEmpowerment

Empowerment Index 66.3% 68.4% 64.8% 3.6% **Domain: Production 71.6% 77.2% 66.6% 10.6% ***Domain: Resources 54.8% 56.8% 50.6% 6.2% **Domain: Income 87.3% 88.9% 80.3% 8.6% ***

Financial Inclusion:Accounts or formal credit formal inst. 22.4% 21.7% 15.0% 6.7% **

Income proxy:Asset index (productive or household) 7.70 8.47 7.63 0.84 ***Reduced assets because of food insecurity 22.8% 22.6% 28.3% -5.7% *

N 241 230 226

CaracterísticaGroup Differences

AC vs BD

In El Salvador, “something else” generates synergy between RD and CCT programs… and adding RD is a

good “graduation strategy” …

• We did not find a significant difference in outcomes for those still receiving CCT and those who exited the program

• Adding RD produces “gains”…. even in empowerment

… especially for women

Empowerment increased, evenin non “domestic” domains

A (TMC+DR) AC (TMC+DR) BD (TMC) A vs ACWOMEN

EmpowermentEmpowerment Index 58.5% 62.4% 59.0% 3.4% *Domain: Production 50.0% 66.3% 53.9% 12.5% **Domain: Resources 41.4% 48.9% 42.7% 6.2% *Domain: Income 82.3% 87.5% 77.1% 10.4% **

Financial Inclusion:Accounts or formal credit formal inst. 20.2% 16.7% 14.1%

Income proxy:Asset index (productive or household) 7.69 8.14 7.39 0.75 **Reduced assets because of food insecurity 22.6% 20.0% 32.4% -12.4% **

N 124 120 142 MEN

EmpowermentEmpowerment Index 74.6% 74.8% 74.6%Domain: Production 94.4% 92.3% 88.0%Domain: Resources 68.9% 65.5% 63.9%Domain: Income 92.7% 90.5% 85.7%

Financial Inclusion:Accounts or formal credit formal inst. 24.8% 27.3% 16.7% 10.6% *

Income proxy:Asset index (productive or household) 7.71 8.83 8.06 0.77 **Reduced assets because of food insecurity 23.1% 25.5% 21.4%

N 117 110 84

Selected variablesGroup Differences

AC vs BD

Results• We could identify some positive synergies (Intent to Treat

Effects) in all domains evaluated (income, empowerment, financial inclusion)

• There is evidence that the “other” activities of the CCT program (“capacitaciones” and opportunities of social interaction) combined with RD, produce gains, especially for women.

• Results in terms of empowerment in areas other than “domestic”, are larger for women.

• There is evidence that RD programs could be good “graduation strategies” for CCT beneficiaries

• Preliminary qualitative results suggest that there is substantial potential for improving results we will be able to suggest modification to program design and implementation, including further inter-agency coordination