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Does Money Matter? The Effects of Cash Transfers on Child Development in Rural Ecuador

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  • Christina Paxson
  • Norbert Schady

Abstract

A large body of research indicates that child development is sensitive to early-life environments, so that poor children are at higher risk for poor cognitive and behavioral outcomes. These developmental outcomes are important determinants of success in adulthood. Yet, remarkably little is known about whether poverty-alleviation programs improve children's developmental outcomes. We examine how a government-run cash transfer program for poor mothers in rural Ecuador influenced the development of young children. Random assignment at the parish level is used to identify program effects. Our data include a set of measures of cognitive ability that are not typically included in experimental or quasi-experimental studies of the impact of cash transfers on child well-being, as well as a set of physical health measures that may be related to developmental outcomes. The cash transfer program had positive, although modest, effects on the physical, cognitive, and socioemotional development of the poorest children in our sample. (c) 2010 by The University of Chicago. All rights reserved.

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  • Christina Paxson & Norbert Schady, 2010. "Does Money Matter? The Effects of Cash Transfers on Child Development in Rural Ecuador," Economic Development and Cultural Change, University of Chicago Press, vol. 59(1), pages 187-229, October.
  • Handle: RePEc:ucp:ecdecc:v:59:y:2010:i:1:p:187-229
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    References listed on IDEAS

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    1. CCTs usually increase schooling but few studies have found gains in test scores – what’s behind this disconnect?
      by Jed Friedman in Development Impact on 2012-04-11 18:28:51

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    1. Norbert Schady & Jere Behrman & Maria Caridad Araujo & Rodrigo Azuero & Raquel Bernal & David Bravo & Florencia Lopez-Boo & Karen Macours & Daniela Marshall & Christina Paxson & Renos Vakis, 2015. "Wealth Gradients in Early Childhood Cognitive Development in Five Latin American Countries," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 446-463.
    2. Powell-Jackson, Timothy & Pereira, Shreya K. & Dutt, Varun & Tougher, Sarah & Haldar, Kaveri & Kumar, Paresh, 2016. "Cash transfers, maternal depression and emotional well-being: Quasi-experimental evidence from India’s Janani Suraksha Yojana programme," Social Science & Medicine, Elsevier, vol. 162(C), pages 210-218.
    3. Bernal, Raquel & Fernández, Camila, 2013. "Subsidized childcare and child development in Colombia: Effects of Hogares Comunitarios de Bienestar as a function of timing and length of exposure," Social Science & Medicine, Elsevier, vol. 97(C), pages 241-249.
    4. Eric V. Edmonds & Norbert Schady, 2012. "Poverty Alleviation and Child Labor," American Economic Journal: Economic Policy, American Economic Association, vol. 4(4), pages 100-124, November.
    5. Diana Lopez-Avila, 2016. "Child Discipline and Social Programs: Evidence from Colombia," Working Papers halshs-01305961, HAL.
    6. Fernald, Lia C.H. & Hidrobo, Melissa, 2011. "Effect of Ecuador's cash transfer program (Bono de Desarrollo Humano) on child development in infants and toddlers: A randomized effectiveness trial," Social Science & Medicine, Elsevier, vol. 72(9), pages 1437-1446, May.
    7. Schady, Norbert, 2012. "Cash transfers and anemia among women of reproductive age," Economics Letters, Elsevier, vol. 117(3), pages 887-890.
    8. Landefeld, John C. & Burmaster, Katharine B. & Rehkopf, David H. & Syme, S. Leonard & Lahiff, Maureen & Adler-Milstein, Sarah & Fernald, Lia C.H., 2014. "The association between a living wage and subjective social status and self-rated health: A quasi-experimental study in the Dominican Republic," Social Science & Medicine, Elsevier, vol. 121(C), pages 91-97.
    9. Agénor, Pierre-Richard & Canuto, Otaviano & da Silva, Luiz Pereira, 2014. "On gender and growth: The role of intergenerational health externalities and women's occupational constraints," Structural Change and Economic Dynamics, Elsevier, vol. 30(C), pages 132-147.
    10. Bastos, Paulo & Straume, Odd Rune, 2016. "Preschool Education in Brazil: Does Public Supply Crowd Out Private Enrollment?," World Development, Elsevier, vol. 78(C), pages 496-510.
    11. Victoria Menil, 2015. "Missed Opportunities in Global Health: Identifying New Strategies to Improve Mental Health in LMICs," Working Papers id:7987, eSocialSciences.
    12. repec:eee:socmed:v:193:y:2017:i:c:p:101-109 is not listed on IDEAS
    13. Hidrobo, Melissa & Fernald, Lia, 2013. "Cash transfers and domestic violence," Journal of Health Economics, Elsevier, vol. 32(1), pages 304-319.
    14. Independent Evaluation Group, 2014. "Social Safety Nets and Gender : Learning from Impact Evaluations and World Bank Projects," World Bank Publications, The World Bank, number 21365, August.
    15. Akresh, Richard & de Walque, Damien & Kazianga, Harounan, 2013. "Cash transfers and child schooling : evidence from a randomized evaluation of the role of conditionality," Policy Research Working Paper Series 6340, The World Bank.
    16. repec:eee:wdevel:v:97:y:2017:i:c:p:165-177 is not listed on IDEAS
    17. Felfe, Christina & Deuchert. Eva, 2011. "The tempest: Using a natural disaster to evaluate the link between wealth and child development," Economics Working Paper Series 1146, University of St. Gallen, School of Economics and Political Science.
    18. Perkins, Jessica M. & Kim, Rockli & Krishna, Aditi & McGovern, Mark & Aguayo, Victor M. & Subramanian, S.V., 2017. "Understanding the association between stunting and child development in low- and middle-income countries: Next steps for research and intervention," Social Science & Medicine, Elsevier, vol. 193(C), pages 101-109.
    19. Rebecca Ray & Sara Kozameh, 2012. "Ecuador’s Economy Since 2007," CEPR Reports and Issue Briefs 2012-14, Center for Economic and Policy Research (CEPR).

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