percent) of public spending on university education is received by the richest households. In sum, the higher the level of education, the more rich households benefit.

# _Health and Early Childhood_

44. **Public spending on health benefit rich and poor alike, and the support to the poor is substantial relative to their incomes.** At a first glance, public spending on health appears somewhat regressive, as the richest quintile receive a larger share (22.0 percent) of the subsidy than the poorest (17.4 percent). However, the monetary value of the subsidy received by the poor is substantial and equivalent to 38.6 percent of the incomes of the poorest quintile (Table 6). If converted to cash, the health subsidy would reduce the Gini coefficient by 2.5 percentage points, implying that health benefits are progressive.

45. **The poor benefit mainly from the subsidized regime and from public spending outside the two main regimes.** Almost all Colombians (94 percent) are covered by health insurance either through the contributive or the subsidized regime. Thirty-nine percent of the population form part of the contributive regime financed mainly through payroll taxation of formal workers. Fifty-five percent of the population belongs to the subsidized regime financed through national and subnational budgets and transfers from the contributory regime. The poorest quintile receives 32.7 percent of the spending of the subsidized regime, whereas the richest quintile receives 34.8 percent of the contributive regime benefits. Given that the poorest parts of the population are unlikely to be formal workers, it is reasonable to expect that the benefits in the contributive regime are derived mainly by the better-off households. Transfers from the contributive to the subsidized regime, nonetheless, serve an important redistributive purpose.

**Table** **<u>6.  Incidence of Health Programs (non-monetary)</u>**

||Poor|Distrib<br>est ←|ution of S<br> Quintile|ubsidy<br>→ Ric|hest|Relati<br>Poor|ve increa<br>est ←|se in hou<br> Quintile|sehold i<br>→ Ri|ncome<br>chest|
|---|---|---|---|---|---|---|---|---|---|---|
||1.|2.|3.|4.|5.|1.|2.|3.|4.|5.|
|Outside regime|27.2|25.5|22.7|14.9|9.7|2.3|0.8|0.4|0.2|0.0|
|Subsidized regime|32.7|29.7|20.1|12.2|5.3|29.0|10.0|3.9|1.4|0.2|
|Contributive regime|5.9|11.8|19.6|27.9|34.8|7.4|5.6|5.4|4.4|1.5|
|Total health|17.4|19.4|19.9|21.1|22.0|38.6|16.5|9.7|5.9|1.7|

Note: Gross benefits, excluding incidence of contributions. Source: Nuñez (2009) using 2008 ECV data.

46. **Early childhood programs are well-targeted to the poor, even if small in fiscal terms.** The benefit is progressive with 32.4 percent received by the poorest quintile and only 3.1 percent of the subsidy received by the richest quintile. The cash equivalent of the three main programs, _Primera Infancia_ , ICBF (financed through payroll taxes of formal workers), and a school feeding program, would hypothetically reduce the Gini coefficient by 0.41 and poverty by 0.58 points. The subsidy represents 7.0 percent of the household incomes of the poorest quintile.<sup>25</sup>

> 25 Other relevant social protection initiatives in recent years include the expansion of _Red Juntos_ which tries to integrate more effectively programs targeted to the extreme poor.  Unfortunately, an incidence analysis of this program is not available.

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