Obstacles to Takeup: Ecuador's Conditional Cash Transfer Program, The Bono de Desarrollo Humano

Abstract

Summary Social assistance programs cannot help the poor if the poor do not enroll in them. Obstacles to the takeup of social assistance in industrialized countries include information costs, compliance costs, and psychological costs. Using qualitative field research and quantitative analysis of data from a nationwide survey in 2013–14, we explore the impact of these costs on the takeup of the Bono de Desarrollo Humano (BDH), a US $50 monthly cash transfer in Ecuador. Drawing on interviews with Ecuadorians whose households are eligible for the BDH, as well as on findings about social assistance takeup in industrialized countries, we hypothesize that particular information costs, compliance costs, and psychological costs, along with program design and household poverty, will influence the probability of BDH takeup. We then use probit regression to estimate the statistical effect of these factors on the probability of takeup, using data on 11,449 BDH-eligible households sampled by Ecuador's 2013–14 Encuesta Condiciones de Vida (Living Standards Measurement Survey). Controlling for program design and household poverty, we find that compliance costs and psychological costs each have a significant deterrent effect on BDH takeup. The purpose of social assistance is to help the poor, but if social assistance is to achieve this goal, the poor must actually receive it. This study helps to identify the forces and circumstances that influence the takeup of an important social assistance program in a middle-income Latin American country.