Are social transfers another vehicle for women’s empowerment?

Conditional Cash Transfers grant money to poor households with children provided that their members meet certain conditions. A common feature of many CCT programs in Latin America is that payments are targeted to the mother. Could this policy be a way for women to gain autonomy? Marcelo Bergolo and Estefanía Galván find that a CCT program in Uruguay results in women gaining greater responsibility for decisions in specific spheres of household expenditure. On the negative side, however, it has discouraging effects on their formal employment.

To fight the endless poverty haunting the Latin American continent, social transfers were implemented in many countries. According to the National Statistics institute, in 2005 poverty affected 29% of the population in Uruguay and 50% of those under 18. To address the problem, in 2007 the government launched the Asignaciones Familiares-Plan de Equidad (AFAM-PE), the most wide-ranging social transfer program for low-income families with children in Uruguay, both in terms of coverage and cash benefits. Over the whole territory, nearly 370,000 children were covered by this program in 2014, that is approximately 73% of the children of low-income families. 

Cash transfers to households are conditional on them meeting certain obligations, like school enrolment and medical monitoring of children. These conditions create co-responsibility by the family and the State. By focusing on schooling and health, the transfer aims at reducing the intergenerational reproduction of poverty.

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Targeting mothers?

In most CCT programs, the payments are made to the mother of beneficiary children. Behind this gender-specific targeting lies the idea that women will use the money to improve the well-being of their children, thus meeting the objectives of the program. This means that over 90% of those entitled to the AFAM-PE program are women. In cases where the mother is not the child’s primary caregiver, the payment is made to another female responsible for the children, or to the father. 

Due to the gender-based targeting of CCTs, the program modifies not only the household’s resources but also their distribution among household members. Most of the existing literature, however, focuses on the behavioral effects of CCTs considering the household implicitly as a single unit, even when the social benefits target specific adults within a household. Thus, we know much less about the programs’ intra-household distributional effects and whether these may unintentionally impact the economic and social spheres of household members. 

To help to close this gap in the literature, Marcelo Bergolo and Estefanía Galván investigate the impact of the AFAM-PE program on couples’ decision-making processes and marital dissolution, and on women’s and men’s labor market decisions. In particular, they look at the effects on employment and hours worked, as well as formal (registered) employment choices. 

For this purpose, using data from a follow-up survey matched with administrative records of applicant households, their study analyzes the effect of the program on individuals’ behavior by comparing outcomes of couples just above (i.e., the treatment group) and below (i.e., the comparison group) the program eligibility cut-off1.

• 1The eligibility rule for AFAM-PE entails computing a predicted income score for applicant households based on their baseline socioeconomic characteristics. Because only those applicant households with an income score above a determined threshold are eligible for the AFAM-PE, this rule generates a strong discontinuity in the probability of being assigned into the program, which the authors exploit for identification

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Does AFAM-PE increase women’s power within households?

By giving the monetary transfer to the female partner, the AFAM-PE might enhance her role in decision-making processes within the household. So, is there actually an improvement in female empowerment?

The available data are insufficient to directly measure empowerment. However, the information collected on who makes consumption decisions within the household makes it possible to explore whether female beneficiaries of cash transfers become more prominent in the decision-making process within their households, especially regarding how money is spent. 

The probability of eligible women making more decisions regarding food expenditure than those in ineligible households increases between 12.2 and 18.7 percentage points. There is also an increase in the probability of the woman herself deciding on how to use “additional money received for any work, gift, or new cash-transfer from the state”. These findings are consistent with the suggestion that the program, by giving the income directly to the woman, enhances her position in the decision-making process within the household.

Are labor market decisions affected?

A current debate related to social assistance programs is whether transferring monetary payments to poor families could discourage adults in beneficiary households from working. For the AFAM-PE program, Bergolo and Galvan do not find significant effects on labor force participation or hours worked, neither for men nor women. In other words, the cash transfer does not alter the labor supply decisions of either men or women in households targeted by the program. 

However, the program does affect the women’s formal employment decisions. In particular, it has significant negative effects on the formal employment choice of women, reducing registered employment by 17–22 percentage points at the eligibility cut-off. These responses seem to be accompanied by a lower rate of transitions from unregistered to registered jobs. In other words, women in beneficiary households are more likely to remain in informal jobs compared with women in the control group. Informality tends to be associated with low productivity jobs, employment in small-scale activities and no access to labor rights. Therefore the program could be holding women back, preventing them from moving into better jobs. 

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Gender equity and women’s agency

The findings from the study are relevant to the ongoing debate about the impacts of these kinds of programs on women’s agency. On the one hand, the results show that transferring cash to women increases the overall resource control of female recipients within the household, and thus the policy serves as an efficient promoter of women’s decision-making and autonomy. However, if the program discourages them from taking formal jobs and women gain access to social assistance only as mothers, this instrument might not improve their relative position within the household. 

In the AFAM-PE program, the discouraging of women’s formal employment seems to be an unintended effect of the program’s participation rule and design. Because only earnings from registered sources of labor income can be monitored by the Social Security Administration, there are incentives for strategic behavior in the labor market. That is, the beneficiaries know that the program administrators are monitoring their formal earnings, and remain in the informal sector because they are afraid of losing their benefits. Reducing this disincentive effect would involve redesigning the income-testing by smoothing the implicit tax on household formal earnings at the threshold for eligibility.

Moreover, as has been shown in previous studies for Latin America, targeting women as recipients of the transfers may reinforce the idea that child-raising is primarily a mother’s responsibility (and not the responsibility of fathers). Therefore these policies might actually reinforce traditional gender roles in the organization of work, with women limited to the domestic sphere. For this reason, future designs of social assistance programs should take these possible consequences into account.