Public Transfers and the Poverty of Children and the Elderly in Uruguay

Abstract

AbstractIn Uruguay, public direct transfers reduce poverty for society as a whole. Poverty affects mostly children, even after the recent period of fall in poverty. The aim of this article is to analyze whether the reduction in poverty benefits a particular age group over others or if it affects all groups equally. The methodological strategy consists in the estimation of the contribution of public direct transfers to the poverty exit rate and its decomposition in the coverage effect and the amount effect. The main conclusions are as follows: (i) households with children are the least likely to escape poverty through the direct transfer system; (ii) the reason is the relative low per capita amount of the transfer and not the lack of coverage; and (iii) the effectiveness of the amount is relatively low because poverty before transfers is more intense for households with children, and the transfer that they receive is lower than that for other types of households.