conditional cash transfers
This is the seventh in this year's series of posts by PhD students on the job market.
Conditional cash transfers (CCTs), cash transfers targeted to poor households made conditional on investments in children's human capital, have become increasingly popular over the past two decades (Bastagli et al, 2016). However, CCTs have been criticized as some argue that the poorest households may find the conditions too costly to comply with and thus be excluded from receiving aid (e.g., Freeland, 2007, Baird et al, 2011). Unconditional cash transfers (UCTs), cash transfers with “no strings attached”, are therefore thought to be superior at alleviating current poverty. Consequently, when deciding whether to impose conditions, governments are thought to trade-off the extent to which they increase human capital investments in children versus the extent to which they alleviate current poverty.
Non-farm household enterprises provide an important opportunity for employment in Tanzania. Agriculture is still the primary economic activity of the country, but the economy is shifting away from it and the number of people employed in this sector has been declining since 2006. At the same time, nearly 850,000 individuals a year enter the labor market seeking gainful employment and non-farm household enterprises are growing rapidly. Across the country, 65.9% of households reported household enterprises as a primary or secondary employment.
Due to the growing importance of non-farm household enterprises, our team conducted a study to understand why household enterprises are not growing and what their major constraints are to productivity gains.
Update (January 22, 2019): The paper discussed in this post has subsequently been published in the journal World Development.
Cash transfers seem to be everywhere. A recent statistic suggests that 130 low- and middle-income countries have an unconditional cash transfer program, and 63 have a conditional cash transfer program. We know that cash transfers do good things: the children of beneficiaries have better access to health and education services (and in some cases, better outcomes), and there is some evidence of positive longer run impacts. (There is also some evidence that long-term impacts are quite modest, and even mixed evidence within one study, so the jury’s still out on that one.)
In our conversations with government about cash transfers, one of the concerns that arose was how they would affect the social fabric. Might cash transfers negatively affect how citizens interact with each other, or with their government? In our new paper, “Cash Transfers Increase Trust in Local Government” (can you guess the finding from the title?) – which we authored together with Brian Holtemeyer – we provide evidence from Tanzania that cash transfers increase the trust that citizens have in government. They may even help governments work a little bit better.
This column sets out a monthly selection of social protection materials that I found particularly interesting or helpful in illuminating a certain social protection issue. It is not meant to be comprehensive, but just to highlight and discuss some of the latest thinking and evidence on the matter.
This is the seventeenth, and penultimate, of this year’s job market series.
Research question and motivation
That early-life events can affect adult outcomes is now well established. Lifelong health, education, and wages are all shaped by events of the in-utero and early-childhood environments (Barker 1992; Cunha and Heckman, 2007; Almond et al., 2017). To the extent that adverse shocks can often not be prevented, a key task for researchers and policymakers is to ascertain the potential for and degree of mitigation: Could investing in children's health and education help reduce gaps caused by early-life adversities?
In my job-market paper, we study whether the returns on human capital investments on children differ by exposure to adverse early-life shocks. We focus on two shocks that significantly affect households in developing countries: adverse weather shocks -- i.e., floods and droughts, which reduce children's initial skills--, and the introduction of conditional cash transfers (CCTs), which provide monetary subsidies to families with young children conditional on investments in children's health and education. In particular, we provide empirical evidence on how the effects of CCTs on children's long-term educational outcomes interact with children's early-life exposure to adverse weather shocks.
Cash transfers are great – lots of people are telling you that on a continuous basis. However, it is an open question as to whether such programs can improve the wellbeing of their beneficiaries well after the cessation of support. As cash transfer programs continue to grow as major vehicles for social protection, it is increasingly important to understand if these programs break the cycle of intergenerational poverty, or whether the benefits simply evaporate when the money runs out…
A blogpost on financial incentives in health by one of us in September 2015 generated considerable interest. The post raised several issues, one being whether demand-side financial incentives (like maternal vouchers) are more or less effective at increasing the uptake of key maternal and child health (MCH) interventions than supply-side financial incentives (variously called pay-for-performance (P4P) or performance-based financing (PBF)).
The four of us are now hard at work investigating this question — and related ones — in a much more systematic fashion. And we'd very much welcome your help.