What conditions in cash transfers actually do.

Unconditional cash transfers produce positive effects on consumption, health, and schooling without evidence of waste.

GiveDirectly's Kenya experiments provided large lump-sum transfers ($1,000) to very poor households and tracked outcomes at 2+ years. Recipients increased assets, consumption, psychological wellbeing, and productive investment. No evidence of increased alcohol or tobacco spending emerged. The Finland basic income experiment found that unconditional income support improved wellbeing and mental health without reducing employment. The accumulated evidence from conditional programs like Mexico's Progresa suggests the cash component — not the conditions — drives most effects.

Conditional cash transfers improve education and health outcomes — but the conditions are probably not the mechanism.

Mexico's Progresa conditioned transfers on school attendance and health checkups. Three decades of evidence finds positive effects on education, health, and consumption — but the conditions appear not to be the active mechanism. When researchers compared conditional vs. unconditional transfer programs (in Ecuador, Morocco, and other contexts), outcomes were similar. The primary mechanism appears to be the income effect of the transfer, which reduces the opportunity cost of schooling and improves household nutrition — changes that occur with or without formal conditions.

The conditions in cash transfers serve a political function — not a behavioral one.

Brazil's Bolsa Família, the world's largest conditional cash transfer program, has consistently weak evidence that conditions per se produce effects. Evaluations comparing participants to similar non-participants find positive education and health outcomes — but the comparison is between receiving cash with conditions and receiving no cash. When the comparison is between conditional and unconditional cash, effects converge. The conditions persist because they make programs politically viable, framing them as investment rather than charity — a legitimate political function, even if not a behavioral mechanism.

New York City Family Rewards

New York City, USA · 2007

New York City's Family Rewards — a conditional cash transfer program modeled on Progresa — found that conditions tied to health and education produced modest effects on some outcomes but did not produce large-scale poverty reduction. The transfer amounts were smaller than comparable programs; the condition-compliance requirements may have excluded the most disadvantaged families.