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Conditional Cash Transfers and School Dropout Rates

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  • Lorraine Dearden
  • Carl Emmerson
  • Costas Meghir

Abstract

This paper evaluates a United Kingdom pilot study designed to test whether a means-tested conditional cash transfer paid to 16- to 18-year-olds for staying in full-time education is an effective way of reducing the proportion of school dropouts. The transfer’s impact is substantial: In the first year, full-time education participation rates increase by around 4.5 percentage points while the proportion receiving two years of education increases by around 6.7 percentage points. Those receiving the full payment have the largest initial increase in participation and some evidence is found suggesting that part of the effect can be explained by liquidity constraints.

Suggested Citation

  • Lorraine Dearden & Carl Emmerson & Costas Meghir, 2009. "Conditional Cash Transfers and School Dropout Rates," Journal of Human Resources, University of Wisconsin Press, vol. 44(4).
    • Handle: RePEc:uwp:jhriss:v:44:y:2009:i4:p827-857
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    References listed on IDEAS

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    1. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1992. "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," American Economic Review, American Economic Association, vol. 82(5), pages 1177-1198, December.
    2. Orazio Attanasio & Emla Fitzsimons & Ana Gómez & Martha Isabel Gutierrez & Costas Meghir & Alice Mesnard, 2006. "Child education and work choices in the presence of a conditional cash transfer programme in rural Colombia," IFS Working Papers W06/13, Institute for Fiscal Studies.
    3. Joshua Angrist & Daniel Lang & Philip Oreopoulos, 2006. "Lead Them to Water and Pay Them to Drink: An Experiment with Services and Incentives for College Achievement," NBER Working Papers 12790, National Bureau of Economic Research, Inc.
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