social transfers spend part of it to improve productive activities. Individual multipliers have been found to be around 1.2 and 2.0. In this sense the effect of transfers on household income is higher than the amount received as a direct benefit, which means that the transfer allows households to increase their income generation activities. Evaluation studies of social transfers in Bolivia, Mexico and Malawi show that households receiving cash transfer have higher levels of investment on agricultural production and livestock (Gertler et al (2005) and Martinez (2007), cited by Barrientos and Sabatés-Wheeler, 2009; Miller, 2011). These investments generate additional income for the households. In this sense social transfers reduce poverty, but also provide means to increase income generation activities and self-sufficiency providing opportunities to overcome poverty permanently.20 The aspects of promotion and transformation (Devereux and Sabates-Wheelerr, 2004) are ideally part of any comprehensive social protection program. As such, success could be defined as a household graduating from social protection, i.e. it escaped poverty. However, graduation from SPI is still a largely neglected discussion. Table 10: International evidence of the effect of social transfers on households’ investments Effect Country Source Productive investments: Ethiopia Devereux et al (2006), cited Farming: 15% of households (Productive Safety by Arnold et al (2011) Livestock: 8% of households Nets Programme) Increase in productive investment: ~ 100%
Zambia (Kalomo Social Cash Transfer)
Scheuring (2008), cited by Arnold et al (2011)
Increase in agriculture investments: [45% , 50%]
Paraguay (CCT)
Soares et al (2010), cited by Arnold et al (2011)
Increase of livestock investments: 6%
Paraguay (CCT)
Soares et al (2010), cited by Arnold et al (2011)
Household‟s income multiplier: [1.20 , 1.97]
Mexico (Oportunidades – CCT)
Sadoulet et al (2001) and Gertler et al (2005), cited by Barrientos and SabatésWheeler (2009)
Household‟s consumption multiplier: ~ 2
Bolivia (BONOSOL)
Martinez (2007), cited by Barrientos and SabatésWheeler (2009)
2.5. Behavioural Effects: Labour Social protection has the potential to increase labour productivity through human capital accumulation. The effect on labour decisions can be analysed by productive investments (selfemployment) but also by higher labour market participation and labour mobility between formal and informal activities and economic sectors. Despite the argument that higher and secure income may reduce labour supply due to a substitution effect, it is likely that in the This effects on livelihoods generates the idea of “graduation” from transfers (e.g. Sabates-Wheeler and Devereux, 2010) 20
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