Enhancing equity for children in the context of the reform of energy subsidies in Egypt.

Volume 1: Methodology and research findings

This study aims to provide the Egyptian government with additional empirical evidence to inform the reform of its energy subsidy and social protection programs. In particular, the focus is on protecting the most vulnerable children from the impacts of subsidy cuts through a child cash transfer program financed by using a small part (10% or less) of the savings generated by subsidy cuts. The decision to focus on child cash transfers as the prime mitigating measure emanates from discussions with government officials. It reflects the potential of this instrument to target the most vulnerable groups, notably children living in poverty, more effectively than energy subsidies. Various cash transfer programs, distinguished by their targeting mechanism and the size of transfers provided, are compared in terms of efficiency, cost-effectiveness and impact on child poverty and inequality. In addition, the study provides estimates of the impacts of current energy subsidies on child poverty.