Child benefits and poverty reduction: Evidence from Mongolia's Child Money

Hodges, Anthony, Dufay, Anne-Claire, Dashdorj, Khurelmaa, Yun Jong, Kang, Mungun, Tuya and Budragchaa, Uranchimeg (2007). Child benefits and poverty reduction: Evidence from Mongolia's Child Money.

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  • Author Hodges, Anthony
    Dufay, Anne-Claire
    Dashdorj, Khurelmaa
    Yun Jong, Kang
    Mungun, Tuya
    Budragchaa, Uranchimeg
    Title Child benefits and poverty reduction: Evidence from Mongolia's Child Money
    Publication Date 2007
    Abstract This paper analyses the extent to which Mongolia�۪s Child Money Programme (CMP), a conditional cash transfer programme for families with children, contributes to poverty reduction and the improved well-being of children (with particular reference to MDGs 1 and 2) and does so in an efficient, affordable and sustainable manner. Applying the concepts and performance indicators developed in the international literature on social transfers, it compares the actual performance of the CMP in its initial targeted phase (January 2005 to June 2006) with the simulated expected performance of the CMP in its more recent ���universal�۪ phase, under two different assumptions (the initial benefit level of $31 per child per year and an increase to $117 as approved in the 2007 budget). The paper finds that the targeted programme resulted in very high leakage to non-poor households and substantial exclusion of poor households, due to flaws in the programme�۪s proxy means test and implementation problems. Arguing that it is possible to improve only marginally the methodology and implementation of a proxy means test, and that reversion to a targeted programme would be politically costly, the paper advocates retaining the new universal benefit, which resolves most of the exclusion error, further reduces the child poverty headcount and is progressive along the entire household expenditure distribution due to the heavier concentration of children in the lower deciles. However, the paper identifies some barriers that still hinder access to child benefits by the most severely disadvantaged families and children. It finds little evidence regarding the effects of the programme on the non-monetary dimensions of poverty, in particular regarding the condition on school attendance. The analysis of fiscal costs concludes that the universal benefit is affordable and sustainable at its initial level (about 1.0% of GDP), but cautions that the approved increase in the benefit level in the 2007 budget is fiscally and politically risky given the country�۪s external vulnerability to sharp fluctuations in metal prices and adverse weather.
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    Created: Fri, 13 Dec 2013, 12:12:41 JST