TACKING SOCIAL EXCLUSION: Evidence from Chile

07 Jan 2019

Combining welfare assistance with regular visits by social workers can help families in extreme poverty to take up financial support and enter social programmes. This is the conclusion of research by Pedro Carneiro, Emanuela Galasso and Rita Ginja in the January 2019 issue of The Economic Journal.

According to the study, households targeted by an anti-poverty scheme in Chile who had not previously taken advantage of available social programmes, saw their take-up of family allowance for poor children increase by up to 17%.

Although the authors note that overall the scheme did not improve general housing conditions or employment levels, it did increase the uptake of employment programmes, especially among women. For spouses who took advantage of the jobs services, which include training, there was an increase in employment.

Policymakers often struggle to promote improvements in the well-being of the poorest individuals and families. The challenges are many. People living in extreme poverty frequently have multiple needs that require a range of services. They also may face special psychological and social challenges that can make it difficult for them to connect with and benefit from social assistance programmes. Governments that want to assist this most vulnerable group need to engage the participants, deliver the mix of services that works best for each family, and know what incentives help people successfully utilise available programmes.

To this end, the Chile Solidario (CS) programme was launched in Chile in 2002. This targets the poorest 5% of families in Chile, who are perceived to be alienated from the welfare system.

The scheme combines cash payments and other assistance with regular visits by social workers during a two-year period. Families receive priority access to employment, education and other social assistance, including housing improvements. They are also guaranteed eligible cash subsidies such as child allowances.

The targeted households had not previously taken up the available social programmes. This study suggests that social workers were key in helping these families to bridge this gap, and that pairing social workers with ‘guaranteed access’ to existing social programmes, helped increase the use of this support by families.

There were, however, stubborn pockets of poverty where the assistance does not help. Although participants became better connected with the welfare system in Chile, the research cannot say whether families experienced real improvements to their lives.

To analyse the impact of CS, the researchers compared families just above the cut-off point for eligibility with those just below. By employing this method – known as regression discontinuity design – the authors could attribute differences in use of assistance programmes, in employment and in housing conditions, among other measurements, to participation in CS. The evaluation analyses information from administrative records used by the government to identify people eligible for social programmes.

The authors conclude that Chile’s programme is a useful example of the broad range of issues that need to be addressed to reach people living in extreme poverty and the broad approach governments may need to consider to reduce extreme poverty and tackle social exclusion.

Tackling Social Exclusion: Evidence from Chile’ by Pedro Carneiro, Emanuela Galasso, Rita Ginja is published in the January 2019 issue of The Economic Journal.

Pedro Carneiro

Associate editor | University College London

Emanuela Galasso

senior economist in the poverty group of the development research group of the World Bank

Rita Ginja

associate professor at the department of economics at the University of Bergen