In Parts 1 and 2 of this series, we focused on increasing the returns to education for women and removing institutional constraints. In this installment, we focus on the effects of removing household constraints.
3. Removing household constraints
Conditional cash transfers (CCTs) are popular programs around the world as they reduce current poverty by providing income support to poor families but also encourage them to invest in children’s health and education to reduce future poverty. CCTs work by decreasing the opportunity cost of schooling by tying payments to households to proper school participation by school-aged children. It is clear that if the problem is poverty or a credit constraint, the solution is to provide unconditional cash transfers (UCTs). If there are other market failures causing an underinvestment in children’s schooling, which can be tackled directly in a cost-effective manner, this is also preferable. However, when these problems are intractable, or the solutions to them are too costly or difficult to implement, then CCTs can be used as a reasonable, “second-best” policy alternative. A very large base of evidence shows that CCTs protect educational investments in children (Fiszbein et al. 2009).
However, CCTs can be too expensive when considered solely as schooling interventions because, even in poor countries, most of the transfers go to households who would be sending children to school without the subsidy. This brings up the question of how to design cost-effective transfer programs to optimize investments in children’s education: what is the role of schooling-related conditions and labeling? Who should these programs target? What are the optimal duration, timing, and frequency of transfers? In the remainder of this final blog on keeping adolescent girls in school, we draw a few pointers from recent studies to start answering some of these questions.
A recent systematic review examines the schooling effects of CCT vs. UCT programs but notes that, rather than being a binary policy choice, transfer programs belong on a continuum from purely unconditional to strictly conditional ones (Baird et al. 2014). The review finds that programs where explicit conditions are monitored and enforced, the schooling effects are significantly higher than programs with no conditions or those with minimal monitoring and enforcement (with no causality implied). The finding that schooling CCTs outperform UCTs in terms of schooling outcomes is consistent with the previous experimental (Baird, McIntosh, and Özler 2011; Akresh, de Walque, and Kazianga 2013) and quasi-experimental literature (see Baird, McIntosh, and Özler 2011 for a review). A notable exception is Benhassine et al. (2015), which finds that labeled cash transfers (making education salient to families) are enough to improve outcomes rather than explicit conditions. Baird et al. (2011) also expose a trade-off that is part and parcel of CCT programs, namely that while they are more effective than UCTs in obtaining the desired behavior change (in schooling), they can also undermine the social protection dimension of cash transfer programs by denying transfers to those who fail to satisfy the conditions. They demonstrate this trade-off by showing that unconditional income support to exactly such non-complier households is key to causing substantial delays in marriage and pregnancy among adolescent girls.
What are the effects of CCTs and UCTs to families of adolescent girls in the longer-run? Baird et al. (2015) examines the impacts of the Zomba Cash Transfer Program (ZCTP) more than four years after baseline (and two years after the cessation of cash transfers): looking at a broad range of outcomes that include educational attainment, skills, marriage and fertility, health and nutrition, employment, and empowerment, they find no lasting effects of either program among those who were enrolled in school at baseline. The modest enrollment and test score gains in the CCT arm measured at the end of the program did not translate into increased educational attainment or competencies – likely because school attainment in this group is high in the absence of the program: 88% of the control group reported successfully completing primary school at endline, i.e. two years after the end of ZCTP. Perhaps more surprisingly, the large declines in teen marriages and pregnancies observed in the UCT arm at 24 months were also completely reversed within two years of the end of the transfer program: adolescent girls who received UCTs were no less likely to be ever married or pregnant, have lower total or desired fertility than the control group by endline.
Cash transfers did have lasting impacts on an important subgroup, however: ZCTP made CCT offers to girls who had already dropped out of school at baseline to return to school. There were lasting effects on this group, which comprised 15% of the target group of never-married 13-22 year-old females in Zomba (Malawi), mainly due to the program’s huge success in bringing a large portion of girls back to school. By endline, CCT beneficiaries had completed 0.6 more years of schooling and were 8 percentage points more likely to have completed primary school than the control group. The increased schooling had knock-on effects on marriage and fertility, whereby CCT beneficiaries were less likely to be married and pregnant, had a significantly smaller number of children, and had a lower desired fertility rate. Among those who did get married, age at first marriage was significantly higher by about half a year and there was evidence of assortative matching: beneficiaries’ husbands were 7 percentage points more likely to have completed secondary school.
The longer-term effects presented in Baird et al. (2015) may have important implications for the design of cash transfer programs targeted to adolescent girls:
This policy brief summarized the evidence on the large array of interventions, which can improve schooling among adolescent girls. The evidence points to the importance of several policies:
Akresh, Richard, Damien de Walque, and Harounan Kazianga, “Cash Transfers and Child Schooling: Evidence from a Randomized Evaluation of the Role of Conditionality,” World Bank Policy Research Working Paper 6340.
Baird, Sarah, Ephraim Chirwa, Craig McIntosh, and Berk Özler, “What Happens Once the Intervention Ends? The Medium-Term Impacts of a Cash Transfer Experiment in Malawi,” 3ie Final Grantee Report, 2015: http://www.3ieimpact.org/evidence/impact-evaluations/details/297/
Baird, Sarah, Francisco Ferreira, Berk Özler, and Michael Woolcock, “Relative Effectiveness of Conditional and Unconditional Cash Transfers for Schooling Outcomes in Developing Countries: A Systematic Review,” Journal of Development Effectiveness, 6(2014): 1-43.
Baird, Sarah, Craig McIntosh, and Berk Özler, “Cash or Condition? Evidence from a Cash Transfer Experiment,” Quarterly Journal of Economics, Vol. 126(2011): 1709-1753.
Barrera-Osorio, Felipe, Marianne Bertrand, Leigh L. Linden, and Francisco Perez-Calle, "Improving the Design of Conditional Transfer Programs: Evidence from a Randomized Education Experiment in Colombia," American Economic Journal: Applied Economics, 3(2011): 167-95.
Benhassine, Najy, Florencia Devoto, Esther Duflo, Pascaline Dupas, and Victor Pouliquen, "Turning a Shove into a Nudge? A "Labeled Cash Transfer" for Education," American Economic Journal: Economic Policy, 7(2015): 86-125.
Gertler, Paul, Sebastian Martinez, and Marta Rubio-Codina. 2012. “Investing Cash Transfers to Raise Long-Term Living Standards.” American Economic Journal: Applied Economics 4 (1): 164–92.
3. Removing household constraints
Conditional cash transfers (CCTs) are popular programs around the world as they reduce current poverty by providing income support to poor families but also encourage them to invest in children’s health and education to reduce future poverty. CCTs work by decreasing the opportunity cost of schooling by tying payments to households to proper school participation by school-aged children. It is clear that if the problem is poverty or a credit constraint, the solution is to provide unconditional cash transfers (UCTs). If there are other market failures causing an underinvestment in children’s schooling, which can be tackled directly in a cost-effective manner, this is also preferable. However, when these problems are intractable, or the solutions to them are too costly or difficult to implement, then CCTs can be used as a reasonable, “second-best” policy alternative. A very large base of evidence shows that CCTs protect educational investments in children (Fiszbein et al. 2009).
However, CCTs can be too expensive when considered solely as schooling interventions because, even in poor countries, most of the transfers go to households who would be sending children to school without the subsidy. This brings up the question of how to design cost-effective transfer programs to optimize investments in children’s education: what is the role of schooling-related conditions and labeling? Who should these programs target? What are the optimal duration, timing, and frequency of transfers? In the remainder of this final blog on keeping adolescent girls in school, we draw a few pointers from recent studies to start answering some of these questions.
A recent systematic review examines the schooling effects of CCT vs. UCT programs but notes that, rather than being a binary policy choice, transfer programs belong on a continuum from purely unconditional to strictly conditional ones (Baird et al. 2014). The review finds that programs where explicit conditions are monitored and enforced, the schooling effects are significantly higher than programs with no conditions or those with minimal monitoring and enforcement (with no causality implied). The finding that schooling CCTs outperform UCTs in terms of schooling outcomes is consistent with the previous experimental (Baird, McIntosh, and Özler 2011; Akresh, de Walque, and Kazianga 2013) and quasi-experimental literature (see Baird, McIntosh, and Özler 2011 for a review). A notable exception is Benhassine et al. (2015), which finds that labeled cash transfers (making education salient to families) are enough to improve outcomes rather than explicit conditions. Baird et al. (2011) also expose a trade-off that is part and parcel of CCT programs, namely that while they are more effective than UCTs in obtaining the desired behavior change (in schooling), they can also undermine the social protection dimension of cash transfer programs by denying transfers to those who fail to satisfy the conditions. They demonstrate this trade-off by showing that unconditional income support to exactly such non-complier households is key to causing substantial delays in marriage and pregnancy among adolescent girls.
What are the effects of CCTs and UCTs to families of adolescent girls in the longer-run? Baird et al. (2015) examines the impacts of the Zomba Cash Transfer Program (ZCTP) more than four years after baseline (and two years after the cessation of cash transfers): looking at a broad range of outcomes that include educational attainment, skills, marriage and fertility, health and nutrition, employment, and empowerment, they find no lasting effects of either program among those who were enrolled in school at baseline. The modest enrollment and test score gains in the CCT arm measured at the end of the program did not translate into increased educational attainment or competencies – likely because school attainment in this group is high in the absence of the program: 88% of the control group reported successfully completing primary school at endline, i.e. two years after the end of ZCTP. Perhaps more surprisingly, the large declines in teen marriages and pregnancies observed in the UCT arm at 24 months were also completely reversed within two years of the end of the transfer program: adolescent girls who received UCTs were no less likely to be ever married or pregnant, have lower total or desired fertility than the control group by endline.
Cash transfers did have lasting impacts on an important subgroup, however: ZCTP made CCT offers to girls who had already dropped out of school at baseline to return to school. There were lasting effects on this group, which comprised 15% of the target group of never-married 13-22 year-old females in Zomba (Malawi), mainly due to the program’s huge success in bringing a large portion of girls back to school. By endline, CCT beneficiaries had completed 0.6 more years of schooling and were 8 percentage points more likely to have completed primary school than the control group. The increased schooling had knock-on effects on marriage and fertility, whereby CCT beneficiaries were less likely to be married and pregnant, had a significantly smaller number of children, and had a lower desired fertility rate. Among those who did get married, age at first marriage was significantly higher by about half a year and there was evidence of assortative matching: beneficiaries’ husbands were 7 percentage points more likely to have completed secondary school.
The longer-term effects presented in Baird et al. (2015) may have important implications for the design of cash transfer programs targeted to adolescent girls:
- Financial or credit constraints may not always be of first-order importance -- even in very poor countries. The lack of lasting effects of UCTs (or CCTs for that matter) on human capital accumulation suggests that financial or credit constraints are not of first-order importance in this context. Even small amounts of regular cash transfers such as those provided under ZCTP were very effective in causing a large array of improvements in the short-term (psychological wellbeing, early childbearing and marriage, sexually transmitted infections, nutrition, etc.), but because they did not cause an increase in human capital investments, they disappeared after the cessation of support. In this context, availability of safe and well-paying jobs for women, changing norms and aspirations, may well be more important than relaxing credit constraints.
- Targeting can substantially improve cost-effectiveness. The large effects on the subgroup of baseline dropouts point to the importance of targeting. The findings suggest that catching girls early using household characteristics that are predictive of school dropout to determine eligibility and transfer size may be more cost-effective.
- CCT programs need to start early and continue until the end of middle or secondary school. Such programs produce more durable effects on both human capital accumulation and poverty reduction (Gertler, Martinez, and Rubio-Codina 2012). The duration of the two-year ZCTP, even delivered at a crucial period of transition in these adolescent females’ lives, may have been too short.
- The choice between a CCT and UCT program may be a false dichotomy. Basic unconditional grants can be made available to all poor households, which can be topped up by transfers conditional on school attendance, completing certain grades, obtaining certificates, etc. Alternatively, given the large contemporaneous effects of UCTs in delaying marriage and pregnancy, and non-negligible school dropout even in early grades, governments can offer CCTs to young children, which can be switched to UCT programs once the adolescents reach childbearing age (or complete a certain level).
- Finally, governments can experiment with the timing and frequency of transfers. For example, lump-sum (or balloon) payments that are conditional and delivered at the time of school re-enrollment can be more effective than the traditional equal-sized monthly cash transfers, particularly for the most at-risk children (Barrera-Osorio et al. 2011).
This policy brief summarized the evidence on the large array of interventions, which can improve schooling among adolescent girls. The evidence points to the importance of several policies:
- Increasing the availability of jobs for women and disseminate information about the availability of such opportunities and the real returns to schooling.
- Reducing the costs of schooling, in particular by building “girl-friendly” schools and decreasing the opportunity costs of schooling.
- Conditional cash transfer programs can improve school attainment and have knock-on effects on delaying marriage and lowering (desired) fertility, but such programs need to weigh the implied trade-offs and carefully consider key design parameters, such as targeting, conditions, as well as the duration and timing of payments for cost-effectiveness.
Akresh, Richard, Damien de Walque, and Harounan Kazianga, “Cash Transfers and Child Schooling: Evidence from a Randomized Evaluation of the Role of Conditionality,” World Bank Policy Research Working Paper 6340.
Baird, Sarah, Ephraim Chirwa, Craig McIntosh, and Berk Özler, “What Happens Once the Intervention Ends? The Medium-Term Impacts of a Cash Transfer Experiment in Malawi,” 3ie Final Grantee Report, 2015: http://www.3ieimpact.org/evidence/impact-evaluations/details/297/
Baird, Sarah, Francisco Ferreira, Berk Özler, and Michael Woolcock, “Relative Effectiveness of Conditional and Unconditional Cash Transfers for Schooling Outcomes in Developing Countries: A Systematic Review,” Journal of Development Effectiveness, 6(2014): 1-43.
Baird, Sarah, Craig McIntosh, and Berk Özler, “Cash or Condition? Evidence from a Cash Transfer Experiment,” Quarterly Journal of Economics, Vol. 126(2011): 1709-1753.
Barrera-Osorio, Felipe, Marianne Bertrand, Leigh L. Linden, and Francisco Perez-Calle, "Improving the Design of Conditional Transfer Programs: Evidence from a Randomized Education Experiment in Colombia," American Economic Journal: Applied Economics, 3(2011): 167-95.
Benhassine, Najy, Florencia Devoto, Esther Duflo, Pascaline Dupas, and Victor Pouliquen, "Turning a Shove into a Nudge? A "Labeled Cash Transfer" for Education," American Economic Journal: Economic Policy, 7(2015): 86-125.
Gertler, Paul, Sebastian Martinez, and Marta Rubio-Codina. 2012. “Investing Cash Transfers to Raise Long-Term Living Standards.” American Economic Journal: Applied Economics 4 (1): 164–92.
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