Can unconditional in-kind transfers keep children out of work and in school? Evidence from Indonesia

The International Labour Organisation estimates that 152 million children are engaging in child labour globally which creates a need for evidence based policies and interventions to eliminate it. Particularly, there is limited evidence about the effect of in-kind transfers on child labour, impeding policy development. We address this evidence gap by examining the impacts of an unconditional in-kind transfer, a subsidised rice program, on child labour as well as schooling, using household survey data from Indonesia. To identify the causal effect we employ coarsened exact matching with difference-in-differences estimator. The results indicate that the program is effective in increasing the probability of schooling for girls though it does not have a significant impact on the probability of working as a child. However, as an unconditional in-kind transfer, its ability to increase schooling for girls, especially of those who are not currently attending school, provides an important policy implication on how a food subsidy program can indirectly influence child wellbeing.