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Health spillover effects of a conditional cash transfer program

Abstract

We use data from the Familias en Acción program in Colombia to examine the spillover or indirect effects of a conditional cash transfer program. Our results show that the program has significant spillover effects: it leads to an improvement in the health of non-targeted individuals in treatment households in terms of both incidence and severity of illness. The benefits are stronger for women and the elderly in the short run and for men in the medium run. Our analysis suggests that these spillovers are driven by increased access to information in the household that creates a public good.

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Notes

  1. See Fiszbein and Schady (2009), DFID (2011), Baird et al. (2011), and Bastagli et al. (2016) (among others) for more on CCT programs. Bastagli et al. (2016) report that 63 low- and middle-income countries around the world have some form of a conditional cash transfer program.

  2. See Lagarde et al. (2007) for a survey of the direct effects on health of CCT programs.

  3. We use the terms indirect effects and spillovers synonymously. Importantly, we define spillovers as different from unintended impacts. While unintended impacts are defined in the light of outcomes that were not targeted by the program design, spillovers are defined in terms of the effects on individuals who were not targeted in the program design. Adults in the household are not targeted in the program we consider, and the program’s design does not include any incentive to improve the health of non-targeted adult members of the household.

  4. US $20.45 at the 2002 exchange rate.

  5. In Table 8 of this paper, we also show that the program has a positive effect on the likelihood of stunting (child’s height-for-age z-score < − 1).

  6. Around 82% of the titulars were the mother of the child and 95% of the titulars were females.

  7. Contrast this with the PROGRESA program. As Gertler (2004) notes, the program imposes the explicit condition that other family members visit clinics once a year for physical checkups and that all adult family members participate in regular meetings at which health, hygiene, and nutrition issues and best practices are discussed (see Gertler 2004, p. 337). Thus, one could argue that other adults in the household were also targeted beneficiaries of the program. That is not the case in the FA program.

  8. There is a larger literature on across-household spillovers of CCT programs that take the form of gifts or other transfers (Angelucci and De Giorgi 2009), an increase in overall incomes (Angelucci and De Giorgi 2009), learning from peer interaction (Bobonis and Finan 2009; Lalive and Cattaneo 2009), changes in behavior due to changes in social norms (Avitabile 2011), or the desire to behave like the eligible population in the hope that they would become eligible, particularly when the eligibility criteria are not well defined within the community and knowledge spillovers occur (Bobba and Gignoux 2019). There is also evidence that CCTs have significant effects on other domains of life, for example, crime and conflict (Chioda et al. 2016; Crost et al. 2016).

  9. In the Appendix A, we present a simple theoretical framework to show how the three channels could manifest. This is, of course, not to say that these three channels are exhaustive. The program can lead to improvements in the supply of basic health services either as part of the program or as a part of a complementary strategy to expand health services in areas where the program is implemented. Alternatively, the program could provide preferential or facilitated access to services to the eligible. We do not consider these supply-side factors in this paper.

  10. The SISBEN is a proxy means test indicator of economic wellbeing that is used throughout Colombia to target welfare programs. Families were surveyed by the municipal authorities and centrally classified into one of the six categories according to their level of measured poverty. The poorest families were classified in level 1, and the richest in level 6.

  11. In the main regression results we present the difference-in-difference estimates, controlling for baseline observables, bearing in mind that there is a potential for the estimates to be biased. To analyze the extent of this (potential) bias, we examine the robustness of the results using propensity score matching in the comparison of treatment and control households. These results are discussed in Section 4.4.4.

  12. See http://www.dnp.gov.co for more details.

  13. We include the number of visits to complete the interview, the number of enumerators to complete the interview, the number of supervisors of the enumerators and if the interview was incomplete as measures of the quality of the interview. We also include dummies for the supervisor code and the percentage of attrition in the municipality. See Fitzgerald et al. (1998) for more on this methodology.

  14. For example, individuals who are more educated, wealthier and from socially advantaged groups, are typically more aware of the limitations imposed on them by their health status and are more likely to report themselves (and their family) as being of poor health. This is known as the cultural conditioning problem.

  15. We also examine whether the results are driven by heterogeneity of average health in the household at the baseline. We divide the sample into two groups: households that were in better health at the baseline and households that were in poorer health. We define better and poorer health accordingly to the average household health relative to the sample mean (proportion of household members reporting ill or reporting hospitalization); those with average < mean for the sample (better health at baseline) and those with average ≥ mean for the sample (poorer health at baseline). The regression results for the two sub-samples are presented in Appendix Table 9: columns 1–4 for households with better health at baseline and columns 5–8 for households with poorer health at baseline. We include two different ways of classifying households: in panel A according to the average health of adults aged 18–59 and panel B according to the average health of the elderly, 60 and higher. The results in panel A of Table 9 show that the results in Table 2 are not driven by average health of adults at baseline. However, the corresponding results in panel B of Table 9 imply that the results are driven by households with elderly in poor health at the baseline.

  16. We find the level of education is, in general, higher for men than for women; and this pattern is stronger for the elderly.

  17. The set of observable characteristics used to compute the propensity score are identical to the ones used by Attanasio et al. (2010).

  18. Matching households with the same p(x) assumes that assignment to treatment or control is random for individuals with the same propensity score. However, this method relies on the assumption of no significant differences between treatment and control households in terms of the unobservable characteristics.

  19. We are unable to run the corresponding regressions by age because of sample issues.

  20. The specifications in columns 2 and 4 are, therefore, problematic in a difference-in-difference setting as they compare changes in different time periods.

  21. Ver Ploeg (2009) writes that it is not possible to tell whether this is due to increased food benefits that are then shared with the non participating children in the family or whether the income offset by the WIC benefits is used to improve the diets of nonparticipating members with other foods (p. 425).

  22. In all regressions we control for labor supply including the number of hours worked. This helps us to isolate the program income effect from any labor supply income effect. The IFS-Econometria-SEI (2006) program report shows an increase in the job market participation by adults but no program effect on the number of hours worked.

  23. Stunting (or more generally height-for-age z-score) reflects the cumulative effect of under-nutrition and infections since birth and therefore, it can be interpreted as an indicator of poor environmental conditions. We define a child to be stunted if his/her height-for-age z-score is less than − 1 The height-for-age z-score is calculated using the WHO Child Growth standards (WHO 2019).

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Acknowledgment

We would like to thank the editor, Shuaizhang Feng, and two anonymous referees of this journal, Sarah Baird, Paul Christian, Juan Miguel Gallego, Bansi Malde, Manuel Ramirez and seminar and conference participants at the Centre for Health Economics at Monash University, the Universidad del Rosario, the Australasian Econometric Society Meetings, the Australian Health Economic Society Meeting and the NEUDC Meetings for their comments and suggestions. The usual caveat applies.

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Correspondence to Diana Contreras Suarez.

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Appendices

Appendix A: Theoretical Framework

To explain the mechanisms by which a spillover effect might result, we use a stylistic unitary household model (see Behrman and Deolalikar 1988, Chaudhuri 2009). Consider a household with n members. The utility function that defines the preferences of the household is well behaved and can be written as:

$$ U_{j}=U_{j}(H_{ij},X_{ij},Z_{ij}) $$
(A.1)

where Uj is the utility of the j th household, Hij represents the vector of the health of individuals i = 1, 2, … , n in household j and Zij represents the vector of health inputs and Xij represents the vector of all other consumption goods of household members. Utility maximization is subject to the household budget constraint and the health production functions of all the individuals in the household.

The health production function of the household members can be written as:

$$ H_{ij}=H(X_{ij},Z_{ij},W_{j}(F),H_{-ij};\mu) $$
(A.2)

Health production within the household depends on the use of health inputs (Zij), consumption of all other goods (Xij), household public good (Wj), health of all other members in the household excluding oneself (Hij) and all the observed and unobserved endowments of the household (μ). We subdivide the household into two groups: the targeted or T members (for example children aged 0–6 who are the direct beneficiaries of the program) and the other or O members of the household who are not the targeted beneficiaries. Also Hij = {H1j, … , Hi− 1j, Hi+ 1j, … , Hnj} and \(H_{ij}\in [H_{ij}^{T},H_{ij}^{O}]\). Health inputs (Zij) depends on health inputs provided by the FA program (zFA) and private health inputs (zP), so that we can write

$$ Z_{ij}=Z(z_{j}^{FA}(F),z_{ij}^{P}) $$
(A.3)

Since zFA is only available to targeted individuals residing in the treatment municipalities, it is a function of the health program (F). Note that the health and nutrition component of the FA program involves a lump sum payment to the household, irrespective of the number of targeted individuals. Hence, \(z_{j}^{FA}(F)\) is defined at the household level. Likewise household public good (W) is also a function of F, generated when the program is present in the household. Define F = 1 when the program is available (for households with targeted individuals in the treatment municipalities) and F = 0 if otherwise. Then \(z_{j}^{FA}(F)=0~\text {if}~F=0\) and \(z_{j}^{FA}(F)>0~\text {if}~F=1\). Likewise Wj(F) = 0 if F = 0 and Wj(F) > 0 if F = 1.

The household budget constraint when Y is the pooled household income, \(p_{z^{P}}\) and px are prices of the private health inputs and consumption goods respectively can be written as:

$$ \sum\limits_{i}p_{x}X_{ij}+\sum\limits_{i}p_{z^{P}}z_{ij}^{P}=Y+z_{j}^{FA}(F) $$
(A.4)

Maximizing utility (given by Eq. (A.1)) subject to the production constraints (given by Eqs. (A.2) and (A.3)) and the budget constraint (given by Eq. (A.4)), the reduced form demand functions for health inputs, consumption and outcome variables can be written as:

$$ \{H_{ij}^{T},H_{ij}^{O},Z_{ij},W_{j},X_{ij}\}=f(p_{x},p_{z^{P}},Y_{j};F,\mu_{j}) $$
(A.5)

Program intervention (through F) that changes any of the right-hand side variables will change the allocation of resources and outcomes within the households to conform to the optimizing allocation. The impact of the program on the targeted and non-targeted population can therefore be written as:

$$ \begin{array}{@{}rcl@{}} \frac{\partial{H_{ij}^{T}}}{\partial{F}} & = & \underbrace{\left( \frac{\partial{H^{T}}}{\partial{X_{ij}}}\right)\left( \frac{\partial{X_{ij}}}{\partial{F}}\right)+\left( \frac{\partial{H^{T}}}{\partial{z_{ij}^{P}}}\right)\left( \frac{\partial{z_{ij}^{P}}}{\partial{F}}\right)}_{\text{Income effect}} + \underbrace{\left( \frac{\partial{H^{T}}}{\partial{W_{j}}}\right)\left( \frac{\partial{W_{j}}}{\partial{F}}\right)}_{\text{Household public good effect}} \end{array} $$
(A.6)
$$ \begin{array}{@{}rcl@{}} & & + \underbrace{\left( \frac{\partial{H^{T}}}{\partial{H_{-ij}}}\right)\left( \frac{\partial{H_{-ij}}}{\partial{F}}\right)}_{\text{Contagion effect}} + \underbrace{\left( \frac{\partial{H^{T}}}{\partial{z_{j}^{FA}}}\right)\left( \frac{\partial{z_{j}^{FA}}}{\partial{F}}\right)}_{\text{Direct effect}} \\ \\ \frac{\partial{H_{ij}^{O}}}{\partial{F}} & = & \underbrace{\left( \frac{\partial{H^{O}}}{\partial{X_{ij}}}\right)\left( \frac{\partial{X_{ij}}}{\partial{F}}\right)+\left( \frac{\partial{H^{O}}}{\partial{z_{ij}^{P}}}\right)\left( \frac{\partial{z_{ij}^{P}}}{\partial{F}}\right)}_{\text{Income effect}} +\underbrace{\left( \frac{\partial{H^{O}}}{\partial{W_{j}}}\right)\left( \frac{\partial{W_{j}}}{\partial{F}}\right)}_{\text{Household public good effect}} \end{array} $$
(A.7)
$$ \begin{array}{@{}rcl@{}} & &+ \underbrace{\left( \frac{\partial{H^{O}}}{\partial{H_{-ij}}}\right)\left( \frac{\partial{H_{-ij}}}{\partial{F}}\right)}_{\text{Contagion effect}} \end{array} $$

The focus of this paper is on spillovers, and therefore, we are interested in the effects captured through Eq. (A.7). The first two terms \([(\frac {\partial {H^{O}}}{\partial {X_{ij}}})(\frac {\partial {X_{ij}}}{\partial {F}})+(\frac {\partial {H^{O}}}{\partial {z_{ij}^{P}}})(\frac {\partial {z_{ij}^{P}}}{\partial {F}})]\) denote the income effect, the third term \([(\frac {\partial {H^{O}}}{\partial {W_{j}}})(\frac {\partial {W_{j}}}{\partial {F}})]\) denotes the household public good effect and the last term \([(\frac {\partial {H^{O}}}{\partial {H_{-ij}}})(\frac {\partial {H_{-ij}}}{\partial {F}})]\) denotes the contagion effect. Note that the total effect on the targeted individuals (Eq. (A.6)) has an additional term which is the direct effect of the program on those targeted (given specifically by the program requirement—regular attendance and check-ups in the health clinics).

Appendix Tables

Table 9 Heterogeneity of program effects by health of household at baseline
Table 10 Program effects for all adults aged 18 and higher in the balanced sample
Table 11 Program effect when excluding early treatment and converted municipalities
Table 12 Comparison of characteristics across matched and unmatched samples
Table 13 First stage propensity score. Dependent variable: treatment
Table 14 Difference-in-difference results using propensity score matching
Table 15 Program effect on mortality
Table 16 Placebo regressions: program effect on adult’s educations
Table 17 Program effect on household composition

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Contreras Suarez, D., Maitra, P. Health spillover effects of a conditional cash transfer program. J Popul Econ 34, 893–928 (2021). https://doi.org/10.1007/s00148-020-00809-y

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Keywords

  • Conditional cash transfer
  • Health spillovers
  • Colombia
  • Familias en Acción
  • Mechanisms

JEL Classification

  • O15
  • I15
  • I38
  • D62