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The effect of cash transfers to schools on voluntary contributions

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  • Bando, Rosangela

Abstract

School-based management programs aim to improve education outcomes by involving parents in allocation decisions about external funds transferred to the school. This paper explores the effects of two school-based management programs on parental investment in schools via voluntary contributions. One program provides both a cash grant and a matching scheme for privately raised funds. Difference-in-differences estimation shows that parents in richer schools increased voluntary contributions by 28%, while parents in poorer schools decreased voluntary contributions by 11%. This implies that a matching scheme results in higher inequality in resources available to schools. The second program provides only a cash grant to poor schools. Based on a randomized control, estimation shows that parents use 83% of the grant to substitute for voluntary contributions. A cash grant alone for poor schools results in an increase in resources available to the school in less than the cash grant transfer.

Suggested Citation

  • Bando, Rosangela, 2015. "The effect of cash transfers to schools on voluntary contributions," Journal of Economic Behavior & Organization, Elsevier, vol. 111(C), pages 224-236.
    • Handle: RePEc:eee:jeborg:v:111:y:2015:i:c:p:224-236
    DOI: 10.1016/j.jebo.2014.12.024
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    More about this item

    Keywords

    Education; Investment; Parental investment; School based management; School grants; Voluntary contributions;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I2 - Health, Education, and Welfare - - Education
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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