New research on Conditional Cash Transfers

A recently published London School of Economics Ph.D. thesis, ‘Essays on conditional cash transfers, targeting and educational outcomes: evidence from Chile’, by Cristián Crespo Rojas, concludes that

Have CCTs [Conditional Cash Transfers] worked? In multiple countries CCTs have been successful in alleviating poverty, increasing health care utilisation, and raising school enrolment and attendance rates. Have they  gone too far? In Latin America the number of beneficiaries of CCTs surpassed the number of the poor in 2006. Within the latter policy framework, my research has answered questions located at the intersection of CCTs, their targeting (especially through PMTs) and educational outcomes using large and rich Chilean administrative datasets. Although the thesis has focused its analysis on one country, it has provided findings and implications that will be useful in multiple contexts. (pp. 188-89)

One Conditional Cash Transfer studied, Bono por Logro Escolar (BLE), pays cash rewards to students if their exam results reach specified levels. Crespo Rojas concludes that

Whether to reward children according to their academic performance remains a hotly debated and unresolved topic. I observe no significant effects on educational outcomes for the first Chilean cash for grades programme. Further research and an enhanced BLE design may be needed to deliver grades for cash. Otherwise, the country risks little return on its money. (p. 112)

To read the thesis, click here.


Another recent Ph.D. thesis, ‘Social policies in Ecuador: the effects of minimum wages and cash transfers’, by Wilson Guzman, studies

the Ecuadorian … Bono de Desarrollo Humano (BDH), … an unconditional cash transfer (UCT) programme
as the conditions were never enforced by its administrators. This characteristic of the BDH allows me to identify the effects of a CT [Cash Transfer] programme with de jure conditions and compare the findings with the effects generated by other conditional cash transfer (CCT) programmes with monitored and enforced conditions. (p. 22)

The BDH is means-tested, so in this context ‘unconditional’ means that no healthcare or school attendance conditions are enforced. Some of the conclusions are as follows:

My findings suggest that households that receive the BDH … spend more on products rich in proteins such as meat, chicken, eggs, etc. compared to households … just above the cut-off that do not get the transfer. … However, unlike the results of the effects of … CCT programmes, I do not find a significant effect on expenditure on fruit and vegetables.

There are two pathways, and their interaction, that might explain this increase in expenditure on protein-rich food. First is the increase in the household budget, which in turn increases the capability to buy products as meat, chicken, milk, etc. that otherwise would be difficult to afford. Second, is the change in the intra-household dynamics. As argued by Schady and Rosero (2008), the BDH appears to increase the bargaining power of women within the household and, as a result, the BDH cash transfer is used differently from other sources of income. Considering that the BDH is received by mothers who have children, the increase in expenditure on more nutritious food may be the result of a pattern of expenditure that better reflects their preferences.

Additionally, the BDH generates a substitution effect by increasing the expenditure on meat, chicken, eggs, etc. and reducing the expenditure on ready meals outside the house, for household with children under 5. This finding reinforces our conclusion that the BDH not only increases consumption but also generates changes in the pattern of consumption that reflect the preferences of the mother in the household. …

The BDH increases expenditure on school related items and services (books and notebooks, school uniforms, transport to school, tuition fees, etc.), both in absolute terms and as a fraction of total expenditure, for beneficiary families living in urban areas. This increase and the increase in expenditure on products rich in proteins go in line with the objectives of the programme. Based on these results, one can conclude that the programme is achieving its objectives of increasing the access to more and better-quality food and facilitating the access to education for school-aged children. (pp. 136-37)

To read the thesis, click here.