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Conditional Cash Transfers in Brazil, Chile, and Mexico: Impacts Upon Inequality

Conditional Cash Tranfers have reduced inequality in three Latin American countries: Brazil, Mexico, and Chile. While they represent only a small share of total income, they have lead to a 21 percent drop in inequality in Brazil and Mexico, and to 15 percent reduction in Chile.

by Eduardo Zepeda, Sergei Soares, Rafael Guerreiro Osório, Fábio Veras Soares, and Marcelo Medeiros

published by

Estudios Economicos

on February 1, 2009

Source: Estudios Economicos

In a new policy paper, Carnegie's Eduardo Zepeda and associates decompose changes in the Gini coefficient to investigate whether the Conditional Cash Tranfers (CCT) have had an inequality reducing effect in three Latin American countries: Brazil, Mexico and Chile. They conclude that CCT programs helped reducing inequality between the mid-1990s and the mid-2000s. The share of total income represented by the CCTs is very small, less than 1%. But as their targeting is outstanding, the equalizing impact of CCTs was responsible for about 21% of the fall in Brazilian and Mexican inequality figures. In Chile, the effect was responsible for around 15% of the reduction.

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