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Does the form of delivering incentives in conditional cash transfers matter over a decade later?

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  • Ham, Andrés
  • Michelson, Hope C.

Abstract

We study whether Honduran municipalities exposed to a conditional cash transfer program from 2000 to 2005 experience lasting effects on human capital and labor market outcomes. The government randomly assigned three forms of delivering program benefits across targeted municipalities: demand (vouchers), supply (clinic and school subsidies), and a combination of both. This program provides an opportunity to explore if and how differential exposure to incentives produces longer term effects. Using municipal-level panel data, these effects are estimated using difference-in-differences. We find that the form of delivering cash transfers influences the degree to which these programs make progress towards their objective of reducing future poverty. Compared to municipalities receiving support from the Honduran Poverty Reduction Strategy, our study indicates that exposure to demand-side incentives individually has no lasting impact. However, joint exposure to both demand- and supply-side incentives does lead to measurable improvements in schooling and labor market participation.

Suggested Citation

  • Ham, Andrés & Michelson, Hope C., 2018. "Does the form of delivering incentives in conditional cash transfers matter over a decade later?," Journal of Development Economics, Elsevier, vol. 134(C), pages 96-108.
  • Handle: RePEc:eee:deveco:v:134:y:2018:i:c:p:96-108
    DOI: 10.1016/j.jdeveco.2018.05.007
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    Cited by:

    1. Sarah Baird & David McKenzie & Berk Özler, 2018. "The effects of cash transfers on adult labor market outcomes," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 8(1), pages 1-20, December.
    2. Pfutze, Tobias, 2019. "Should program graduation be better targeted? The other schooling outcomes of Mexico’s Oportunidades," World Development, Elsevier, vol. 123(C), pages 1-1.

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    More about this item

    Keywords

    Conditional cash transfers; Long-term effects; Demand- and supply-side incentives; Human capital; Labor markets;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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