Fostering social mobility: The case of the 'Bono de Desarrollo Humano' in Ecuador

Social protection programmes are now implemented in many low and middle income countries due to their efficacy in reducing poverty, vulnerability, and inequality. However, the literature is scarce regarding long-term effects of social transfers. Using administrative panel data, this study analyses the determinants of social mobility in Ecuador using a multivariate welfare index, and evaluates the effect of the Ecuadorian social transfer programme Bono de Desarrollo Humano (BDH). Results show that social policies should focus on vulnerabilities related to household composition, the accumulation of human capital, and the accumulation of durable goods. Complementary policies must address gender, ethnic and geographical equity, as well as reproductive health. Finally, we find that the BDH does foster social mobility, especially for higher per capita amounts and if the transfer is complemented with economic inclusion programmes.

Keywords: Social mobility, social transfers, human development, poverty and inequality

JEL Classification - H24, I31, I38, O20