Uninsured Risk and Asset Protection: Can Conditional Cash Transfer Programs Serve as Safety Nets?
Conditional cash transfer (CCT) programs have proved to be effective in inducing chronic poor households to invest in the human capital of their children while helping reduce poverty. They have also protected child human capital from the shocks that affect these households. In this paper, we argue that many non-poor households exposed to uninsured shocks have to use children as risk coping instruments, creating long term irreversibilities in child human capital development. We explore how CCT programs can be designed to serve as safety nets for the vulnerable non-poor when hit by a shock. This would help them not use children as risk coping instruments, thus avoiding long term irreversibilities in child human capital development and creation of a source of new poor.