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Does Supply Matter? Initial Supply Conditions and the Effectiveness of Conditional Cash Transfers for Grade Progression in Nicaragua

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  • John A. Maluccio

    ()

  • Alexis Murphy
  • Ferdinando Regalia

Abstract

We combine administrative and survey data to examine the effect of a conditional cash transfer program on grade progression in Nicaragua from 1999–2003, putting the spotlight on initial supply side conditions and the extent to which they conditioned program effectiveness. Our principal findings are that the program had a substantial effect on grade progression and that these increased over time, even after the original intervention group stopped receiving demand-side transfers. Half of the estimated program effect on progression is accounted for by a reduction in the dropout and repetition rates of beneficiary children who were already in school when the program began. Supply side conditions were important and several of them led to heterogeneous program impacts. The program was more effective in areas with autonomous schools, suggesting flexibility at the school level better enabled schools to respond to changing demand conditions. At the same time, it was also more effective in intervention areas with poor initial supply conditions as measured by indicators of grade availability and distance to school. These were the areas with lower enrollments and grade progression before the program, and thus more room for improvement. With the analysis of child schooling in hand, we then turn to assess the “effect” of the program on school supply conditions. It is precisely in the intervention areas with poor initial school supply conditions, that the program was relatively more effective in improving school supply as measured by grade availability, number of sessions per day and number of teachers. The results suggest that initial school supply conditions do not represent insurmountable obstacles for the implementation of a conditional cash transfer program, as long as these constraints are identified at the planning stage and mechanisms put in place to deal with them during the execution stage. Our results also underscore the importance of carefully considering the integrated (demand and supply) nature of conditional-cash-transfer programs, something often overlooked in the design of these interventions and, particularly, in the impact evaluation literature.

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File URL: http://www.middlebury.edu/services/econ/repec/mdl/ancoec/0908.pdf
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Bibliographic Info

Paper provided by Middlebury College, Department of Economics in its series Middlebury College Working Paper Series with number 0908.

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Length: 38 pages
Date of creation: Aug 2009
Date of revision:
Handle: RePEc:mdl:mdlpap:0908

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Keywords: impact evaluation; conditional cash transfer; schooling; supply side;

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  1. Alderman, Harold & Watkins, Susan Cotts & Kohler, Hans-Peter & Maluccio, John A. & Behrman, Jere R., 2000. "Attrition in longitudinal household survey data," FCND briefs 96, International Food Policy Research Institute (IFPRI).
  2. Handa, Sudhanshu, 2002. "Raising primary school enrolment in developing countries: The relative importance of supply and demand," Journal of Development Economics, Elsevier, vol. 69(1), pages 103-128, October.
  3. Gitter, Seth R. & Barham, Bradford, 2007. "Women's Power, Conditional Cash Transfers and Schooling in Nicaragua," Staff Paper Series 517, University of Wisconsin, Agricultural and Applied Economics.
  4. Duncan Thomas & Elizabeth Frankenberg & James P. Smith, 2000. "Lost But Not Forgotten: Attrition and Follow-up in the Indonesian Family Life Survey," Working Papers 00-03, RAND Corporation Publications Department.
  5. Paul Schultz, T., 2004. "School subsidies for the poor: evaluating the Mexican Progresa poverty program," Journal of Development Economics, Elsevier, vol. 74(1), pages 199-250, June.
  6. John Maluccio, 2008. "Household Targeting In Practice: The Nicaraguan Red De Protección Social," Middlebury College Working Paper Series 0802, Middlebury College, Department of Economics.
  7. James J. Heckman & Jeffrey A. Smith, 1995. "Assessing the Case for Social Experiments," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 85-110, Spring.
  8. David P. Coady & Susan W. Parker, 2004. "Cost-effectiveness Analysis of Demand- and Supply-side Education Interventions: the Case of PROGRESA in Mexico," Review of Development Economics, Wiley Blackwell, vol. 8(3), pages 440-451, 08.
  9. Jere R. Behrman & John Hoddinott, 2005. "Programme Evaluation with Unobserved Heterogeneity and Selective Implementation: The Mexican "PROGRESA" Impact on Child Nutrition," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(4), pages 547-569, 08.
  10. Heinrich, Carolyn J., 2007. "Demand and Supply-Side Determinants of Conditional Cash Transfer Program Effectiveness," World Development, Elsevier, vol. 35(1), pages 121-143, January.
  11. John Maluccio & Natàlia Caldés & David Coady, 2005. "The Cost of Poverty Alleviation Transfer Programs: A Comparative Analysis of Three Programs in Latin America," Middlebury College Working Paper Series 0527, Middlebury College, Department of Economics.
  12. Gary Burtless, 1995. "The Case for Randomized Field Trials in Economic and Policy Research," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 63-84, Spring.
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