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A Comparison of the Economics Impacts of Conditional and Unconditional Cash Transfers in Egypt

Imane Helmy (), Christian Richter (), Khalid Siddig () and Hebatallah Ghoneim ()

No 50, Working Papers from The German University in Cairo, Faculty of Management Technology

Abstract: This paper uses a computable general equilibrium model to distinguish between the economy-wide impact of targeting conditional and unconditional cash transfer to Egyptian households following the full removal of subsidies. Analyzing the impact on the middle class whose vulnerability increased during the reform is another addition of this paper that makes an empirical contribution to the literature discussing the effectiveness of cash transfer compared to price subsidies. The STAGE model is calibrated on the Egyptian Social Accounting Matrix 2012/13. The results show that the removal of subsidies will have the largest negative impact on the consumption of middle class. Moreover, Conditional Cash Transfer (CCT) maintains the best policy for mitigating the harmful effect of removing subsidies. It has a positive impact on the demand for labor in education and health sectors where the majority of labor is skilled males and semi-skilled females. Similarly, introducing CCT will boost production in health and education sectors.

Keywords: Subsidies Reform; Conditional Cash Transfer; CGE model (search for similar items in EconPapers)
JEL-codes: C68 E16 O21 R20 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2018-09
New Economics Papers: this item is included in nep-ara and nep-cmp
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