Conditional Cash Transfer (CCT) programs have become very popular among development economists. This programs pay poor families to have their children attend school and/or get vaccinated. Some of the larger programs include Bolsa Família in Brazil and Oportunidades in Mexico.
Should economists support CCTs that pay the poor to get vaccinated? This depends on 2 factors: 1) are these program effective and 2) what are the unintended consequences of implementing CCT. Let us review both issues.
CCT program effectiveness
Barham and Maluccio (2009) review some of the studies on CCTs and vaccination rates.
- Mexico. “Barham et al. (2007) examine the effect of the Mexican CCT program, Oportunidades, in rural areas using data from a randomized experiment…They ﬁnd small average program effects, on the order of 3 percentage points, and argue that this is due to high coverage rates (above 90%) before the program. They also find…larger effects for those children whose mothers were less educated or who lived further away from a health facility.”
- Honduras. “Morris et al. (2004) examine the impact of a conditional voucher program in rural Honduras, also using a randomized experiment. They ﬁnd small signiﬁcant increases for the ﬁrst dose of DPT and no effect for MCV, but do not investigate DPT3 or sub-population effects.”
- Nicaragua. Barham and Maluccio (2009) investigate the Red de Protección Social (RPS) CCT which began in 2000. They find that “the program led to large increases in vaccination coverage…Effects were particularly large for those sub-populations that are traditionally harder to reach children who live further away from a health facility or whose mothers are less educated. In terms of achieving eradication, on-time vaccination coverage in the treatment group was close to or greater than 95% for BCG, OPV3 and DPT3 by 2002, whereas it remained below 90% for the country as a whole for OPV3 and DPT3.”
Overall, it does seem that paying individuals does increase vaccination rates.
Below is a list of some of the unintended consequences of CCTs:
- Weakening the formal sector and stifling tax revenues. Usually, only poor individuals are eligible for these conditional cash transfers. This program structure gives poor individuals an incentive to either underreport income or to avoid participating in the formal sector workforce.
- Using CCTs for political means. Politicians may vary the CCT by municipality to get votes. Populist candidates will advocate raising the level of the cash transfer to attract the votes of the poor.
- Corruption. Whenever government officials are handing out cash, one has to worry that some portion of program funds land in the pockets of program administrators.
- Weakening of the social contract. Many individuals may get vaccines to protect their children, but also to protect the health of one’s neighbor. Gneezy and Rustichini (2000) found that fining parents who are late to pick up their children from school actually increased tardiness. Similarly, the long term effect of paying people to get vaccines may reduce citizen’s motivation to get their children vaccinate in the absence of payment.
- Effect on Government Credibility in the cash of a deadly vaccine. Earlier this month, I blogged about how the rush to produce a flu vaccine in 1976 actually lead to dozens of deaths. If the government uses a CCT to convince individuals to take an unsafe vaccine, the political backlash will be overwhelming. Poor citizens may lose faith in a number of other well-intentioned government initiatives.
So what do you think? Are conditional cash payments to increase vaccination coverage a good strategy?