The previous post in this blog discussed the positive dynamic effects of conditional cash transfer (CCT) programs in Mexico and Nicaragua – in particular on asset accumulation and the incidence of entrepreneurship by the rural poor.
Labor and Social Protection
No one said it’s easy to run a randomized experiment!
In the early 20th century Helen Todd, a factory inspector in Chicago, interviewed 500 children working in factories, often in dangerous and unpleasant conditions. She asked children the question: “If your father had a good job and you didn’t have to work, which would you rather do—go to school or work in a factory?” 412 said they would choose factory work. One fourteen year old girl, who was interviewed lacquering canes in an attic working with both intense heat and the constant smell of turpentine, said “School is the fiercest thing you can come up against. F
Across developing countries, there is considerable under-investment in children's human capital; it is reflected in low immunization rates, child malnutrition, high drop-out rates, etc. Because of the (both individual and aggregate) long-term effects of human capital investment during childhood, governments across the globe have designed and implemented policies to encourage parents to invest more in the health and education of their children (numerous conditional cash transfer programs across countries are some examples).
In the 1960s, black and white individuals in the United States had radically different labor market outcomes. In 1962, the unemployment rate for African-Americans was 13 percent while it was only 6 percent for whites. Fifty years have passed, enough time for Martin Luther King to go from movement leader to monument, but as of 2010, the unemployment rate in the U.S.
Yesterday, in Part I of this post, we argued the extant empirical evidence suggests that the conditions cause a substantial amount of the desired behavior change intended by CCT programs. In other words: the “substitution effect” due to the condition may well be larger than the “income effect” of the transfers. For example, in the case of the Malawi experiment, the income effect was responsible for less than half of the total impact on school enrollment.
One of the questions discussed at the recent World Bank workshop on the "Second Generation of CCT Evaluations" (website, complete with at least some of the presentations, here) was the role of the first C in the performance of the CCT: how important is the condition in accounting for the outcomes of conditional cash transfer programs?
Tomorrow and on Tuesday (October 24-25), there is a workshop at the World Bank titled “CCTs: The Second Generation of Evaluations.” If you are at the World Bank or in the DC area, you may want to make your way to this event, as it promises to be a good one – focusing on research conducted on the topic in the past three years or so.
I am writing to follow up on Berk’s post about using regression discontinuity design to evaluate the impacts of conditional cash transfer (CCT) programs. It happens that some colleagues and I at the International Food Policy Research Institute recently completed two papers using a unique regression discontinuity design (RDD) to evaluate the impacts of El Salvador’s Comunidades Solidarias Rurales (CSR) program. T
One of the more common requests I receive from colleagues in the World Bank’s operational units is support on evaluating the impact of a large cash transfer program, usually carried out by the national government. Despite the fact that our government counterparts are much more willing to consider a randomized promotion impact evaluation (IE) design these days, still this is often not possible. This could be, for example, because it has already been announced that the program is going to be implemented in certain areas starting on a certain date.