Cash Transfers Reduce Poverty

Do direct cash transfers reduce poverty in poor regions?

Direct cash transfers are generally found to be effective in reducing poverty in poor regions. The evidence from various research studies highlights the positive impact of these transfers:

1. Programs like the Livelihood Empowerment Against Poverty (LEAP) have shown a significant decrease in poverty, with a 29% reduction in those earning below the lower poverty line (Ibrahim & Yeboah, 2014).

2. Cash transfers are noted not only for reducing poverty but also for improving health and achieving other development-related outcomes (Heise, Lutz, Ranganathan, & Watts, 2013).

3. Studies from Senegal and Tanzania demonstrate that social cash transfers significantly impact household welfare, thereby reducing poverty (Gassmann & Behrendt, 2006).

4. Programs targeting children in poor households are particularly effective in poverty reduction (Barrientos & de Jong, 2006).

5. Direct taxes and cash transfers are significant in reducing inequality and poverty, with varying degrees of effectiveness in different countries like Argentina, Brazil, Uruguay, Bolivia, Mexico, and Peru (Lustig, Pessino, & Scott, 2014).

6. In rural Niger, cash transfers have led to sustained investments in assets and productive activities, particularly among the poorest, reducing poverty (Stoeffler, Mills, & Premand, 2016).

In conclusion, direct cash transfers are an effective tool for poverty reduction, improving household welfare, health, and livelihood in poor regions.