A randomized experiment with cash transfers

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One of the debates surrounding cash transfers is the importance of “conditionality” clauses. For example, see this new paper by Norbert Schady and Maria Caridad Araujo on “Cash Transfers, Conditions, School Enrollment, and Child Work: Evidence from a Randomized Experiment in Ecuador.”

This paper uses a randomized study design to analyze the impact of the Bono de Desarrollo Humano (BDH), a cash transfer program, on enrollment and child work among poor children in Ecuador. There are two main results. First, the BDH program had a large, positive impact on school enrollment, about 10 percentage points, and a large, negative impact on child work, about 17 percentage points. Second, the fact that some households believed that there was a school enrollment requirement attached to the transfers, even though such a requirement was never enforced or monitored in Ecuador, helps explain the magnitude of program effects.

For more on the Bono de Desarollo program see the IDB or ECLAC - both resources are in Spanish.

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