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Are Conditional Cash Transfers Fulfilling Their Promise? Schooling, Learning, and Earnings After 10 Years

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  • Barham, Tania
  • Macours, Karen
  • Maluccio, John

Abstract

Interventions aimed at improving the nutrition, health, and education of young children are often motivated by their potential to break the intergenerational transmission of poverty. A prominent example, conditional cash transfers (CCTs), has become the anti-poverty program of choice in many developing countries. Evidence is inconclusive as to whether the demonstrated short-term gains translate into the longer-term educational and labor market benefits needed to fully justify them. This paper uses the randomized phase-in of a 3-year CCT program in Nicaragua to estimate long-term effects. We estimate these effects using experimental variation, complemented by two alternative non-experimental identification strategies. We focus on boys aged 9-12 years at the start of the program who, due to the program's eligibility criteria and prior school dropout patterns, were more likely to have been exposed to the program in the early treatment than in the late treatment group. Previously demonstrated short-term increases in schooling are sustained after 10 years, and there are substantial gains in learning. These improvements in human capital coincide with positive labor market returns - the young men are more likely to engage in wage work, migrate temporarily for better paying jobs, and have higher earnings. In Nicaragua, schooling and learning gains hence translate into earning gains for these young men, implying important long-term returns to CCT programs.

Suggested Citation

  • Barham, Tania & Macours, Karen & Maluccio, John, 2017. "Are Conditional Cash Transfers Fulfilling Their Promise? Schooling, Learning, and Earnings After 10 Years," CEPR Discussion Papers 11937, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:11937
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    References listed on IDEAS

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    1. Karen Macours & Norbert Schady & Renos Vakis, 2012. "Cash Transfers, Behavioral Changes, and Cognitive Development in Early Childhood: Evidence from a Randomized Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 247-273, April.
    2. Rachid Laaja & Karen Macours, 2021. "Measuring Skills in Developing Countries," Journal of Human Resources, University of Wisconsin Press, vol. 56(4), pages 1254-1295.
    3. John A. Maluccio, 2009. "Household targeting in practice: The Nicaraguan Red de Protección Social," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(1), pages 1-23.
    4. Orazio Attanasio & Sarah Cattan & Emla Fitzsimons & Costas Meghir & Marta Rubio-Codina, 2020. "Estimating the Production Function for Human Capital: Results from a Randomized Controlled Trial in Colombia," American Economic Review, American Economic Association, vol. 110(1), pages 48-85, January.
    5. Angelucci, Manuela & De Giorgi, Giacomo & Rangel, Marcos A. & Rasul, Imran, 2010. "Family networks and school enrolment: Evidence from a randomized social experiment," Journal of Public Economics, Elsevier, vol. 94(3-4), pages 197-221, April.
    6. Manuela Angelucci & Giacomo De Giorgi, 2009. "Indirect Effects of an Aid Program: How Do Cash Transfers Affect Ineligibles' Consumption?," American Economic Review, American Economic Association, vol. 99(1), pages 486-508, March.
    7. Abadie, Alberto & Imbens, Guido W., 2011. "Bias-Corrected Matching Estimators for Average Treatment Effects," Journal of Business & Economic Statistics, American Statistical Association, vol. 29(1), pages 1-11.
    8. Doyle, Orla & Harmon, Colm & Heckman, James J. & Logue, Caitriona & Moon, Seong Hyeok, 2017. "Early skill formation and the efficiency of parental investment: A randomized controlled trial of home visiting," Labour Economics, Elsevier, vol. 45(C), pages 40-58.
    9. Guido W. Imbens, 2015. "Matching Methods in Practice: Three Examples," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 373-419.
    10. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    11. Teresa Molina Millan & Karen Macours, 2017. "Attrition in randomized control trials: Using tracking information to correct bias," NOVAFRICA Working Paper Series wp1702, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    12. World Bank, 2001. "Nicaragua Poverty Assessment : Challenges and Opportunities for Poverty Reduction, Volume 2. Annexes," World Bank Publications - Reports 15532, The World Bank Group.
    13. Karen Macours & Norbert Schady & Renos Vakis, 2012. "Cash Transfers, Behavioral Changes, and Cognitive Development in Early Childhood: Evidence from a Randomized Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 247-273, April.
    14. World Bank, 2003. "Nicaragua - Poverty Assessment : Raising Welfare and Reducing Vulnerability," World Bank Publications - Reports 14668, The World Bank Group.
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    Cited by:

    1. Teresa Molina Millan & Karen Macours, 2017. "Attrition in randomized control trials: Using tracking information to correct bias," NOVAFRICA Working Paper Series wp1702, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    2. Armando Barrientos & Daniele Malerba, 2020. "Social assistance and inclusive growth," International Social Security Review, John Wiley & Sons, vol. 73(3), pages 33-53, July.
    3. Del Boca, Daniela & Pronzato, Chiara & Sorrenti, Giuseppe, 2021. "Conditional cash transfer programs and household labor supply," European Economic Review, Elsevier, vol. 136(C).
    4. Baird, Sarah & McIntosh, Craig & Özler, Berk, 2019. "When the money runs out: Do cash transfers have sustained effects on human capital accumulation?," Journal of Development Economics, Elsevier, vol. 140(C), pages 169-185.
    5. 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.

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    More about this item

    Keywords

    CCT; education; labor markets; learning; long-term effects;
    All these keywords.

    JEL classification:

    • 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
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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