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Intrahousehold Responses to Imbalanced Human Capital Subsidies: Evidence from the Philippine Conditional Cash Transfer Program

Author

Listed:
  • David Raitzer

    (Asian Development Bank)

  • Odbayar Batmunkh

    (Asian Development Bank)

  • Damaris Yarcia

    (Asian Development Bank)

Abstract

Extensive global evidence suggests that conditional cash transfers (CCTs) encourage long-term investment in human capital by poor households. However, CCTs also have the potential to distort incentives for investment among children. If only some children in the household are monitored/subsidized for compliance with conditionalities, returns to household investment in those children increase relative to siblings who are unmonitored/unsubsidized. This paper demonstrates that puzzling nutrition effects of the Philippine CCT are driven by effects on children unmonitored for educational compliance, due to a cap of monitoring at most three children per household. Regression discontinuity design interacted with a secondary instrument for monitoring finds that while monitored children have improved human capital investment, such investment declines for unmonitored children relative to nonbeneficiaries. Patterns are consistent for parental expectations, health, anthropometric, and educational outcomes, and are stronger for boys, in accordance with theoretical expectations. Equalized incentives among children can enhance intended CCT effects.

Suggested Citation

  • David Raitzer & Odbayar Batmunkh & Damaris Yarcia, 2021. "Intrahousehold Responses to Imbalanced Human Capital Subsidies: Evidence from the Philippine Conditional Cash Transfer Program," ADB Economics Working Paper Series 645, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0645
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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