Verónica Escudero, Senior ILO Economist and Elva López Mourelo, ILO Economist
During an economic crisis, Conditional Cash Transfers (CCTs) are one way that governments can use to protect vulnerable people from falling into poverty. Between 2001 and 2002, Argentina suffered one of the worst economic crises in its history. Unemployment rose, the share of people living below the poverty line increased and political instability and social unrest ensued.
The Argentinian government responded to the crisis in May 2002 with Plan Jefes, which had the goal of providing economic support to the hardest hit families. The Plan initially provided a monthly allowance of 150 pesos to unemployed heads of households with children under the age of 18 or with disabled dependents. It is estimated that Plan Jefes provided income to about 2 million beneficiaries at its peak in May 2003 (compared to 60 thousand beneficiaries of social insurance schemes the same year).
In an effort to reduce poverty in a more sustainable manner and re-orient the programme to address the needs of the economic recovery, in 2006, Plan Jefes was superseded by a series of new programmes. One of these programmes was the Seguro de Capacitación y Empleo (SCE), which provided skills upgrades and job seeking and job placement assistance to eligible beneficiaries of Plan Jefes. In particular, participants in the SCE received a monthly stipend in exchange for which they had to commit to regular meetings with Public Employment Service officials in order to develop a career plan, participate in training, apprenticeship or vocational orientation activities, and accept job offers that corresponded to their profile and experience.
In countries like Argentina, women account for the majority of conditional cash transfer programme beneficiaries.
In a recent paper, Effectiveness of Active Labour Market Tools in Conditional Cash Transfers Programs: Evidence for Argentina, we look at the effectiveness of this policy on both the employability of beneficiaries and the resultant job quality, with the final aim of shedding light on whether active labour market policies contribute to a successful and sustained labour market integration of CCT beneficiaries.
Our study finds that SCE improved the job quality of former Plan Jefes participants by increasing the likelihood of their having a formal job and raising hourly wages. In addition, the programme was associated with a lower probability of having a low-paid job and working an excessive number of hours. However, the effects of the SCE were not distributed evenly. The programme did not contribute to an improvement in labour market conditions for women, who accounted for about 70 per cent of the former Plan Jefes beneficiaries.
This raises two questions. First, despite the overall success of the SCE and the large share of female participation, why did the program not contribute to an improvement of their labour market conditions? And second, what’s the best way to improve programme mechanisms and outcomes for female beneficiaries?
Why was the SCE not as effective for female beneficiaries?
In looking at gender-specific impacts of the SCE, it’s important to take into consideration the prevailing gender inequalities in Argentina. The lack of effectiveness or even negative impacts of the SCE on female participants could be related to a general lack of opportunities for women in local labour markets.
Another possible explanation is that male and female SCE participants chose to participate in different components of the programme depending on their preferences, employment history and skills profile. These different specific components could give rise to different labour market trajectories after participation, since tools might differ in their ability to successfully improve the employability of participants.
What’s the best way to improve outcomes for women?
Offering child support to women in the programme would be one means of improving outcomes, as it could help to reduce drop-out rates, ensure full participation and improve uptake of the programme’s different components.
Moreover, it is important to tailor measures to the particular needs of the target group. One example would be the provision of different types of training according to women’s preferences, work experience and the demands of local labour markets.
This is an important factor to consider given that, in Argentina and other countries like it, women constitute the majority of beneficiaries of income support programmes.
For those interested in the role of active labour market policies not only in Argentina, but in the entire region, you can read our report – What works: Active labour market policies in Latin America and the Caribbean.