Does conditioning cash transfers on health treatment harm the health of other families on low incomes who depend on public services? Evidence from Brazil

Abstract

SummaryMotivationCash transfers have become popular for relieving poverty in the Global South. Many programmes are conditional on beneficiaries complying with medical check‐ups, nutritional assessments, and vaccinations. Such conditions may improve the health of beneficiaries, above all the health of their young children. But often public health provision is strained. Might the increased attention to those getting the transfers reduce health services to non‐beneficiaries, and especially those on low incomes who cannot afford private medicine?PurposeWhat are the impacts of the largest and longest‐lived conditional cash transfer programme in the world, Brazil's Bolsa Família (BF), on the health of non‐beneficiaries living in poverty? Does the health of non‐beneficiaries suffer when BF requirements come into place? Do the health requirements of BF lead to increased administrative costs for local health centres? Do they squeeze remaining resources for health care?Methods and approachSurveys from before and after the creation of BF are used to model the probability of death for infants born into poor households, comparing those enrolled in BF to those not included. The impacts of the BF programme on local health budgets are modelled through regression analysis. The analysis takes advantage of the varying degree of coverage of BF at the level of municipalities across Brazil.FindingsImplementation of BF led to lower risk of death of infants from beneficiary families than predicted by trends before BF, while infants from impoverished non‐beneficiary families developed a higher‐than‐expected risk of death. The benefits to the former group were larger than the harm to the latter group, which explains why BF appears to reduce infant and child mortality in aggregate. The expansion of BF depressed local spending on primary health care. Above all, more of the health budget and staff time was spent on monitoring compliance with health conditionalities.Policy implicationsThe harmful spillovers from BF to the health of low‐income households who were not included in the programme pose questions about the conditions that often accompany cash transfer programmes. In cases like Brazil, where budgets for public health care are limited, unconditional transfers might be preferable. Or, if health conditions are applied to cash transfer beneficiaries, then extra resources need to be granted to health centres to allow them to deal with the increased demand from beneficiaries for services.