Generalization of family allowances: A relatively inexpensive measure with favorable effects on poverty, according to Policy Center

Generalization of family allowances: A relatively inexpensive measure with favorable effects on poverty, according to Policy Center

The Policy Center think tank has just published a study entitled “Generalization of family allowances and impact on the monetary poverty and vulnerability of children in the post-Covid period in Morocco”.

Through this study, the authors analyzed on the one hand the impact of the pandemic and the compensatory measures taken by the government to mitigate the impact of the health crisis and on the other hand, the generalization of family allowances on poverty. monetary policy and the vulnerability of the Moroccan population, especially children. The results of this study show that the measures put in place by the government, in addition to having compensated for the effect of the pandemic on poverty and vulnerability, also turn out to have been pro-poor. According to the said study, the government’s compensation measures have more than compensated for the negative effects of the pandemic on household income. Indeed, average per capita consumption increased by almost 4% in urban areas and 1.5% in rural areas. This translates into a reduction in the incidence of poverty by 15.52% at the national level and in vulnerability (-17.57% for Morocco). The generalization of family allowances in this context leads to a reduction in poverty of 18.10% and of 24.30% in vulnerability at the national level compared to the situation in 2019, despite the pandemic.

These reductions in poverty and vulnerability are greater for children aged 5 to 17 in urban areas. In rural areas, it is children under 5 who benefit the most from family allowances. In addition, according to calculations made, the cost of anti-Covid aid would have cost the government 11.24 billion DH. They were mainly distributed in urban areas (71.8%). Anti-Covid aid amounts to 316.33 DH per individual in the population (361.64 DH in urban areas against 239.54 DH in rural areas). The cost per beneficiary is 376.75 DH. This analysis shows that the per capita cost is 50% higher in urban areas than in rural areas. This is explained by the fact that the pandemic has more affected activities in the urban environment with its two dimensions, formal and informal. Moreover, the generalization of family allowances would cost the government 6.71 billion DH annually, representing 188.79 DH per individual.

This cost would amount to 264.96 DH per year and per beneficiary. It also appears that the inequality between the two environments is reduced thanks to the generalization of family allowances, this is an additional argument in favor of this social policy. To put the cost of the generalization of family allowances into perspective, the authors note that on the basis of the value of Moroccan GDP for 2020, estimated at 1,081.63 billion DH, this measure would represent only 0.62% of GDP.

In comparison, and for the same year, the budget of the Compensation Fund, which is also a social protection measure, represents 1.25% of GDP. Thus, the authors believe that the generalization of family allowances seems to be a relatively inexpensive measure for Morocco, with simple targeting and favorable effects on poverty and vulnerability. This measure could have long-term effects by encouraging households receiving this allowance to keep their children in school and thus reduce school drop-out. The authors also believe that other programs can also be revised, harmonized and integrated accordingly (Tayssir, Daam, one million binders, etc.). All these operations would make it possible to better target the populations who deserve to benefit from these measures and to increase the efficiency of the social protection system.

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