How Should Governments Deal With Poverty?

With all the recent political debate over food stamp cuts and raising the minimum wage, the U.S. government is facing difficult questions of not only how to provide assistance to those living in poverty, but also how much. Brazil, on the other hand, is taking a much simpler approach: Just give people money. According to an article in the Washington Post, in 2002, Brazil began simply giving cash, loaded onto a card, to those living in poverty. Currently, 14 million people in Brazil are receiving these cash transfers.
There is only one catch: these benefits are contingent on children in the families in the program attending school. The truancy requirements for the program are even stricter than normal school truancy limits in Brazil. Also, the money is only given to the woman who has custody of the children, following research in developmental economics that has found that women tend to manage money better and will look out better for the interests of their children.
So far, the results seem to be positive. Real per capita household income has risen 6.4% for the poorest 20% of Brazil’s population between 2002-2012, higher than any other income group in Brazil in that period. Though it’s not clear how much of this increase comes from the cash transfers themselves, the trend is nevertheless promising. Further, infant mortality rates are declining significantly for families in the program, and now poorer children are performing above the national average in high school.
Though poverty is of a much greater scale in Brazil, with the poverty line defined as $1.25 per day, this program raises interesting questions as to how our own government can most effectively aid those in poverty.

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