Cash Transfers to Reduce Children ’ s Poverty

This briefing note provides an overview of the role of cash transfers in the reduction of children's poverty in low and middle income countries. Drawing on existing literature and programme experiences, the note outlines the following key points: • There has been an increasing emphasis on (targeted) cash transfers as a key instrument to reduce poverty, deprivation and vulnerability of children worldwide. • Recent study findings highlight the positive impacts of both conditional and unconditional cash transfers on children's education, nutrition and wellbeing. • Evidence is increasingly showing that modest social transfers are affordable and cost-effective even in the poorest countries, particularly when additional resources from international development assistance are taken into account. More and more, social protection is recognised as an essential part of effective poverty reduction strategies and for addressing increasing vulnerability. A social protection approach implies policy interventions, which invest in the capacity of households to reduce the risk of poverty. Social protection measures can be very broad such as investing in accessible and good quality education, health services or more specific, as for instance food aid for particularly vulnerable groups; all are important elements of overall poverty reduction strategies (Marcus, 2004). Childhood poverty is a significant factor in persistent and chronic poverty, as well as in the inter-generational transmission of poverty. Therefore, preventing poverty in childhood can help to prevent entrenchment of poverty. This briefing note focuses on the role of one main social protection instrument, namely cash transfers in reducing childhood poverty in low and middle income countries. Cash transfers, which have a strong record of reducing childhood poverty in industrialized countries, are attracting growing interest from donors and national governments, and are increasingly seen as an under-exploited means of providing basic social protection. Numerous cash transfer schemes have been introduced worldwide, partly as a response to the growing unmet need for social protection, and partly as a reaction against institutionalised food aid, as many governments and donors are shifting in favour of meeting 'predictable hunger' with predictable cash transfers (Save the children et al, 2005). Measures and mechanisms of child-oriented cash-transfers programmes Cash transfers can be defined as " the provision of assistance in the form of cash to the poor or to those who face a probable risk, in the absence of the transfer, of falling into