A cost-effectiveness analysis of social transfers on human capital accumulation

Abstract

The paper reports on an ex-ante evaluation of the long-term effect of the Ecuadorian social transfer programme called "Bono de Desarrollo Humano (BDH)" on human capital accumulation. A dynamic cohort microsimulation model is used to analyse for cost-effectiveness of different policy scenarios. Results show that cash transfers do promote human capital accumulation but with rather small effect. Transfers targeted at critical ages are the most cost-effective to promote human capital accumulation.