Argentina’s Emergency Family Income program mitigated inequality and poverty during COVID-19

Argentina’s Emergency Family Income program (Ingreso Familiar de Emergencia/IFE) was launched in March 2020 to compensate and protect individuals whose income had been severely reduced or lost as a result of the COVID-19 pandemic.¹ The IFE consisted of cash transfers for the unemployed, self-employed in low-income categories, and domestic workers. By October 2020, almost nine million people had received transfers. The program effectively contained the rise of poverty and inequality during the pandemic.

COVID-19 and the health measures the government put in place to contain its spread resulted in significant economic costs. Production activities were suspended and unemployment and poverty levels increased.² During the pandemic in Argentina, the unemployment rate reached 13.1 percent in 2020—up from 10.5 percent in the previous year,³ and a further 41 percent of households experienced a decline in income⁴ due to a reduction in working hours, a contraction in the level of sales, and/or layoffs.⁵ This occurred in the midst of an economic crisis in the country: Argentina was already experiencing growing unemployment, high inflation, and a shrinking economy prior to the outbreak of COVID-19.⁶

Many households, particularly those without significant savings faced difficulties in obtaining sufficient economic means to subsist.⁷ Women, young people, low-income groups, and informal workers, who were more likely to earn lower wages and for whom remote work was not an option, were hit the hardest by the circumstances.⁸

The Emergency Family Income (Ingreso Familiar de Emergencia or IFE) aimed to compensate and provide immediate economic relief to those whose income had been severely reduced or lost by COVID-19.⁹ The IFE consisted of three cash transfers each of ARG 10,000 (approximately 148 USD) granted to one member of the family group. The first payment was disbursed in April 2020; the second, in June 2020, and the third payment, in July of the same year. To be eligible, a person had to be between the ages of 18 and 65 years old and be one of the following three: unemployed, self-employed in low-income categories, or domestic workers.¹⁰

Implementation

The IFE was launched in April 2020 by a presidential decree (Decree 310, 2020) and was originally intended to be a one-off payment of ARG 10,000 (approximately 148 USD). The demand and number of people registered far exceeded what the government had initially foreseen. As a result, the registration deadlines were extended and two additional decrees established new payments in June and August 2020.¹¹

The government allowed both households and individuals to apply for cash transfers, which facilitated the effective implementation of the program. ¹² In the first stage, 2.4 million people received the payment automatically as previous beneficiaries of other states’ benefits.¹³ The National Social Security Administration (ANSES) was the entity in charge of receiving and assessing applications.

This IFE was implemented, along with other social protection measures such as unemployment insurance and formal workers’ protection.¹⁴ In November 2020 the government ended the IFE, with the easing of confinement measures and gradual economic recovery.¹⁵ At the same time, the government announced measures to enhance other social protection programs, ¹⁶ such as the Universal Child Allowance (AUH).¹⁷

Cost

Funded by the National Argentinian Treasury, the program was estimated to cost more than ARG 265,000 million (about USD 12.2 million),¹⁸ about 1.14 percent of Argentina’s GDP.¹⁹

Assessment

Nine million people benefitted from the IFE transfers.²⁰ With 56 percent of the beneficiaries being women, and the remaining 44 percent, men; the majority corresponds to unemployed and low-income informal workers (62 percent) and residents of the metropolitan area and the province of Buenos Aires (40 percent).²¹ Studies have demonstrated that the program effectively mitigated the effects of the pandemic on poverty and income inequality. Calcagno suggests without the IFE, 1.4 million people would have fallen into poverty and 2.8 million people would have fallen into extreme poverty.²² If the IFE had not been implemented, national poverty could have risen from around 36 percent to 44 percent.²³

An evaluation by the government indicated that residents of barrios populares—neighborhoods with informal housing and limited access to public services—had a positive perception of the program. They viewed the IFE as an essential measure at the worst moment of the COVID-19 crisis. Residents affirmed they used the cash for food acquisition, urgent home repairs, and debt payments.²⁴

There were also other unintended effects. The IFE prompted a national debate about whether there should be a permanent universal basic income, considering the high levels of informality in the country. It also prompted similar measures in other countries of the region: for instance, Chile implemented its own Emergency Family Income in May 2020.²⁵

Tags

• Argentina
• Children & Youth
• Gender
• Health
• Income & Wealth
• Labor
• Latin America & the Caribbean
• Low-Income Groups
• Middle-Income Country
• Social Protection