80 CHAPTER 5
sal targeting, and targeting of different household types (all elderly regard- less of income, elderly living with children but no prime-age adults, poor elderly, and households headed by elderly) (Kakwani and Subbarao 2005, 6, 17).11 The simulations suggest that targeting a social pension of 0.5 percent of
GDP to elderly-headed households, elderly living with children, and poor elderly would bring about greater poverty reduction (both headcount and poverty gap) gains than would a universal elderly pension. Overall, targeting a pen- sion to the poor elderly over age sixty-five (rather than to all elderly) would produce the best results in all of the 15 countries (Kakwani and Subbarao 2005, 20, 23). Kakwani and Subbarao (2005) summarize the expected impact on the
poverty headcount in each of the 15 countries if a social pension of 35 per- cent of the average poverty line were transferred to poor elderly: headcount poverty would fall by just under 1 percent, to 2.3 percent. If 70 percent of the average poverty line were transferred, headcount poverty would fall by 1.5–4.6 percent.
According to calculations by the Ministry of Gender, Labour, and Social Development (MGLSD) in Uganda, the currently proposed basic household trans- fer of $10 provided to all poor households would be insufficient to lift these households up to the poverty line, so it would have no effect on the poverty headcount. However, this transfer was predicted to reduce the poverty gap by 15 percent (from 8.7 to 7.4 percent). Adding supplementary transfers of $1.14 for each child from birth through age seventeen, to each elderly person over age sixty, and to each person with a disability in the household (up to a limit of five supplementary transfers per household) would bring about a 20 percent reduction in the national poverty gap (driving the poverty gap down to 6.8 percent) (MGLSD 2007, 22–23).12
Conclusion Although evidence of the poverty impacts of social transfers in Africa remains somewhat limited, program evaluations and simulations have shown that such transfers can have a significant impact on poverty reduction to the benefit of HIV-affected households. The impacts vary depending on the poverty measure used. Even when programs do not change headcount poverty substantially, they often reduce the poverty gap and the severity of poverty significantly
11Perfect targeting is defined as “filling the poverty gap,” that is, bringing everyone up to the
poverty line (Kakwani and Subbarao 2005). 12The basic household transfer is Sh 18,000. The supplementary transfer is Sh 2,000 (Uganda, MGLSD 2007, 22).
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