Today marks the International Day for the Eradication of Poverty. Despite the remarkable progress made in past decades, 736 million people still live in extreme poverty. Most worryingly children are disproportionately affected: while they make around a third of the global population, they comprise half of those struggling to survive on less than $1.90 a day. In addition to that, 689 million children are living in multidimensionally poor households.
Not only are children more likely to live in poverty, they also face lifetime consequences like poor health and nutrition, and missed or low-quality education.
Map of extreme child poverty rates by country
Tackling child poverty and investing in children supports their right to live lives of dignity and opportunity. While this should be cause enough to act, when making complex policy choices, it is important to remember that what benefits children also benefits society: investing in children builds the foundation of future cohesion and prosperity – as the World Bank’s Human Capital project so clearly underlines.
Expanding cash transfers for children could offer a way to achieving the Sustainable Development Goals of eradicating extreme child poverty and halving multidimensional child poverty. Cash transfers are a form of social protection that have been shown to address child poverty and improve child well-being, while positively impacting health, education and food security. While the power of cash transfers is well-documented, there are significant gaps in coverage. Estimates suggest that only a quarter of the world’s families globally have access to cash support, and 2 out of 3 children do not have access to social protection coverage.
Is it time to provide every child with a cash grant?
UNICEF is committed to universal approaches to social protection for children as enshrined in the Convention on the Rights of the Child and the Universal Declaration of Human Rights. But does a universal cash grant (UCG), offer an effective way of getting there?
Here are six areas and some key questions that we need to understand better
1. Addressing exclusion errors and using scarce resources effectively
Growing evidence suggests that certain methods of targeting such as proxy-means testing can miss large numbers of people living in poverty. Exclusion errors are estimated to range from 30-40%, sometimes as high as 93%. Universal approaches can address these errors, but in practice would they leave resources spread too thin to make a difference? Are there more effective ways to target and how does effectiveness vary by context?
2. Dignity and shame
The relationship between poverty and shame has been clearly established across many countries and contexts, with emerging evidence on the particularly pernicious effects on children. In countries like India, social protection programmes that explicitly target people living in poverty raise the concern of stigmatizing recipients, labelling them as “lazy”. Stigma is a common reality in high-income countries too. UCGs can address these issues, but it will be helpful to policy makers to understand how prevalent these problems are and if there are ways to address them.
3. Administrative costs
International Labour Organisation (ILO) estimates suggest that for universal schemes the average administrative cost is 3%, whereas for targeted programmes it is 11%. Key drivers of these additional costs are retargeting and recertifying beneficiaries. These processes can also increase the risk of exclusion for those most in need. How significant are the cost savings of a UCG; what impact could they have on benefit amounts and coverage if reallocated, and how do they vary across programmes?
4. Political economy
Universal social protection can contain or reduce the drivers of inequality. This supports social cohesion, and feelings of solidarity and connection among different social groups. Further, a universal child grant that provides benefits across income levels and supports future generations, may strengthen political support and the sustainability of programmes. What are the empirical impacts of different programme types on inequality, and have universal programmes proven to be more sustainable politically?
5. Implications for other programmes
The evidence has proven clearly that providing cash to families with children addresses financial barriers and improves child outcomes. But children and families can have complex needs that require a range of social services including in health, education and care. Scaling up a cash transfer for children at the expense of other essential programmes could be giving from one hand and taking from the other. What is the right balance of social policies that address all aspects of child poverty and how do they reinforce each other?
In some ways, this is the heart of the question. A key argument for targeted approaches are limited government budgets dedicated to social protection for children. Increasing the resources available for social protection for children is fundamental to achieving outcomes. ILO estimates suggest that a UCG for children under 5, with benefits set at 25% of the national poverty line would cost around 1.4% of the GDP in low income countries, and would be a long term expenditure. This is significant, but not overwhelming. A high quality UCG would be a foundational part of national social policy for children, and needs to be prioritized accordingly. Is there the political will to make this happen, and where would resources come from?
To think through these issues, and to explore if UCGs are the best way to ensure universal social protection for every child, UNICEF together with ILO and Overseas Development Institute is convening an International Conference in February 2019, that will bring together experts whose work has underpinned the considerations above. The goal will be to answer the questions: Is it time for universal child grants? And if so, how do we get there?
Contribute your voice on the issues on Twitter @UNICEFSocPolicy
David Stewart is Chief of Child Poverty and Social Protection at UNICEF.
Ian Orton is a Social Protection Consultant at UNICEF.