Incentivizing Schooling for Learning: Evidence on the Impact of Alternative Targeting Approaches

We evaluate a primary school scholarship program in Cambodia with two different targeting mechanisms, one based on poverty level and the other on baseline test scores (“merit†). Both approaches increased enrollment and attendance. Only the merit-based targeting induced positive effects on test scores. This asymmetry is unlikely to have been driven by differences in recipients’ characteristics. We marshal evidence suggesting that the framing of the scholarships might have led to different impacts. In order to balance equity and efficiency, a two-step targeting approach might be preferable: first, identify low-income individuals, and then, among them, target based on merit.