Conditional Cash Transfer

Conditional cash transfer (CCT) programs aim to reduce poverty by making welfare programs conditional upon the receivers' actions. The government (or a charity) only transfers the money to persons who meet certain criteria. These criteria may include enrolling children into public schools, getting regular check-ups at the doctor's office, receiving vaccinations, or the like. CCTs seek to help the current generation in poverty, as well as breaking the cycle of poverty for the next through the development of human capital.

Conditional cash transfers have been used in many countries:

Few development initiatives have been evaluated as rigorously as CCT programs. The implementation of conditional cash transfer programs has been accompanied by systematic efforts to measure their effectiveness and understand their broader impact on household behavior, a marked departure from the limited attention that was paid to rigorous impact evaluations in the past. Evaluation results are available for PROGRESA in Mexico, PETI in Brazil and the Atencion a Crisis in Nicaragua. These evaluations reveal that conditional cash transfers can provide effective incentives for investing in the poor’s human capital.

CCTs have affected not only the overall level of consumption, but also the composition of consumption. There is a good deal of evidence that households that receive CCTs spend more on food and, in the food basket, on higher-quality sources of nutrients than do households that do not receive the transfer but have comparable overall income or consumption levels.

In Bangladesh, Pakistan, and Turkey, where school enrollment rates among girls were lower than among boys, CCTs have helped reduce this gender gap.

CCTs have resulted in sizeable reductions in poverty among recipients—especially when the transfer has been sufficient, well targeted, and structured in a way that does not discourage recipients from taking other actions to escape poverty. Because CCTs provide a steady income, they have helped protect poor households from the worst effects of unemployment, catastrophic illness, and other sudden income shocks. And making cash transfers to women, as virtually all CCTs do, may have increased their bargaining power.

In the US, a paper by the Institute for Research on Poverty concluded in 2011:

"Over time, we find that expenditures have shifted toward the disabled and the elderly, and away from those with the lowest incomes and toward those with higher incomes, with the consequence that post-transfer rates of deep poverty for some groups have increased. We conclude that the U.S. benefit system is paternalistic and tilted toward the support of the employed and toward groups with special needs and perceived deservingness."

...
Wikipedia