Conditional Cash Transfers and Their Effect on Poverty, Inequality, and School Enrollment: The Case of Mexico and Latin America

Over the past two decades, conditional cash transfer (CCT) has become one of the most widespread approaches to social development in Latin America. Spurred in large part by the evident and immediate success of Mexico’s CCT initiative, a multitude of countries began to invest heavily in this strategy hoping to reduce poverty and inequality in the short and long run. This paper examines the relationship between CCT program breadth and poverty, inequality, and secondary school enrollment over a thirteen year span in order to determine whether or not programs with the largest coverage were the most efficient. This question is of grave importance being that as many as eighteen countries are betting on CCT as a means in sustainably breaking poverty cycles. This thesis finds that conditional cash transfer has been exceptionally successful in diminishing extreme poverty in Latin America. Furthermore, although result are inconclusive in terms of moderate poverty, secondary school enrollment, and inequality a trend analysis of fluctuations in poverty and inequality from 1997 to 2010 shows promising results as all development indicators appear to be in decline.