Cash transfers and the COVID-19 pandemic: the experiences of Argentina and Uruguay

This paper presents a comparative analysis of Argentina and Uruguay’s cash transfer responses to the COVID-19 pandemic. Despite similar institutional foundations, the countries adopted contrasting strategies: Argentina expanded horizontal coverage through new programmes reaching nearly half of all households, while Uruguay increased the value of existing transfers. These approaches reflect structural differences, particularly labour informality rates (45% in Argentina vs 25% in Uruguay), and distinct policy orientations, with Uruguay prioritising fiscal equilibrium and targeted interventions and Argentina emphasising broad coverage. Using household survey microdata and decomposition analysis, the study examines the distributional effects of these interventions. In Argentina, transfers offset approximately half of the inequality increase driven by labour income losses and reduced poverty by 4 percentage points. Uruguay’s more targeted approach produced modest aggregate impacts but greater progressivity, reducing poverty by 3 percentage points. During recovery (2020–2022), labour income improvements drove distributional gains in both countries as transfer programmes scaled back. By 2022, inequality had returned to pre-pandemic levels in both countries, but poverty trajectories diverged: Argentina remained 2.5 percentage points above baseline, while Uruguay achieved a 1.4-percentage-point reduction. The findings contribute to debates on designing resilient social-protection systems during economic and health crises in Latin America.