Welfare Conditionality in the OECD and in Latin America: A Comparative Perspective

Abstract

Cash benefit programmes have increasingly emphasised conditionality and “demanding” forms of activation in recent decades. Behavioural requirements are now a key element in reforms of unemployment benefits (UB) and related out-of-work benefits in high-income OECD countries, and they are the defining feature of Conditional Cash Transfer (CCT) programs in many emerging economies, notably in Latin America (LA). In existing research, developments in the two regions have been studied separately from each other, limiting our understanding of commonalities and differences as inputs into policy debates and theory development. We address this gap using three comparative and longitudinal databases on benefit conditionality rules and policy trajectories in Europe, North America, Australasia, and LA. Behavioural requirements varied markedly across regions. They were initially less stringent for LA’s CCTs than for UB programmes in OECD countries, but the gap has narrowed as requirements in LA’s CCT programmes became more demanding. The strictness of requirements was more volatile in LA than in other regions. Although strictness initially varied strongly across LA, the region recently saw faster convergence than high-income OECD countries.

Keywords: welfare conditionality, OECD, Latin America, comparative analysis, activation, unemployment benefits, CCT

JEL Classification: I38, J08, J68, J65