Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ott/wpaper/1108e.html
   My bibliography  Save this paper

Conditional Cash Transfers and Education Quality in the Presence of Credit Constraints

Author

Listed:
  • Elena Del Rey

    (University of Girona, Campus de Montilivi, 17071 Girona, Spain)

  • Fernanda Estevan

    (Department of Economics, University of Ottawa, Ottawa, ON)

Abstract
We investigate the relative merits of unconditional cash transfers (UCT), conditional cash transfers (CCT), and improvements in education quality on efficiency and welfare. In our setting some parents under-invest in their children's education because capital market imperfections prevent them from borrowing. When credit constrained households can be perfectly targeted by the government, we show that CCT are more effective than UCT in enhancing efficiency and equivalent in terms of welfare. When public education quality is very low, raising quality is welfare improving, but is never efficiency enhancing. If the government cannot target constrained households, UCT may be the best policy both in terms of efficiency and welfare.

Suggested Citation

  • Elena Del Rey & Fernanda Estevan, 2011. "Conditional Cash Transfers and Education Quality in the Presence of Credit Constraints," Working Papers 1108E, University of Ottawa, Department of Economics.
    • Handle: RePEc:ott:wpaper:1108e
    as

    Download full text from publisher

    File URL: http://sciencessociales.uottawa.ca/economics/sites/socialsciences.uottawa.ca.economics/files/1108E.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Emmanuel Skoufias & Susan Wendy Parker, 2001. "Conditional Cash Transfers and Their Impact on Child Work and Schooling: Evidence from the PROGRESA Program in Mexico," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2001), pages 45-96, August.
    2. Christina Paxson & Norbert R. Schady, 2002. "The Allocation and Impact of Social Funds: Spending on School Infrastructure in Peru," The World Bank Economic Review, World Bank, vol. 16(2), pages 297-319, August.
    3. Abhijit V. Banerjee & Shawn Cole & Esther Duflo & Leigh Linden, 2007. "Remedying Education: Evidence from Two Randomized Experiments in India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 1235-1264.
    4. Cesar Martinelli & Susan W. Parker, 2003. "Should Transfers To Poor Families Be Conditional On School Attendance? A Household Bargaining Perspective," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 523-544, May.
    5. Hanushek, Eric A, 1995. "Interpreting Recent Research on Schooling in Developing Countries," The World Bank Research Observer, World Bank, vol. 10(2), pages 227-246, August.
    6. Jenny C. Aker & Christopher Ksoll & Travis J. Lybbert, 2012. "Can Mobile Phones Improve Learning? Evidence from a Field Experiment in Niger," American Economic Journal: Applied Economics, American Economic Association, vol. 4(4), pages 94-120, October.
    7. David Coady & Emmanuel Skoufias, 2004. "On the Targeting and Redistributive Efficiencies of Alternative Transfer Instruments," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(1), pages 11-27, March.
    8. Emmanuel Skoufias & David P. Coady, 2007. "Are the Welfare Losses from Imperfect Targeting Important?," Economica, London School of Economics and Political Science, vol. 74(296), pages 756-776, November.
    9. Maluccio, John A. & Flores, Rafael, 2005. "Impact evaluation of a conditional cash transfer program: the Nicaraguan Red de Protección Social," Research reports 141, International Food Policy Research Institute (IFPRI).
    10. Jean-Marie Baland & James A. Robinson, 2000. "Is Child Labor Inefficient?," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 663-679, August.
    11. Lavy, Victor, 1996. "School supply constraints and children's educational outcomes in rural Ghana," Journal of Development Economics, Elsevier, vol. 51(2), pages 291-314, December.
    12. Pierre Dubois & Alain de Janvry & Elisabeth Sadoulet, 2012. "Effects on School Enrollment and Performance of a Conditional Cash Transfer Program in Mexico," Journal of Labor Economics, University of Chicago Press, vol. 30(3), pages 555-589.
    13. Handa, Sudhanshu, 2002. "Raising primary school enrolment in developing countries: The relative importance of supply and demand," Journal of Development Economics, Elsevier, vol. 69(1), pages 103-128, October.
    14. Hanushek, Eric A., 2006. "School Resources," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 2, chapter 14, pages 865-908, Elsevier.
    15. Del Rey, Elena & Estevan, Fernanda, 2013. "Conditional cash transfers and education quality in the presence of credit constraints," Economics of Education Review, Elsevier, vol. 34(C), pages 76-84.
    16. Kenneth I. Wolpin & Petra E. Todd, 2006. "Assessing the Impact of a School Subsidy Program in Mexico: Using a Social Experiment to Validate a Dynamic Behavioral Model of Child Schooling and Fertility," American Economic Review, American Economic Association, vol. 96(5), pages 1384-1417, December.
    17. R. G. Lipsey & Kelvin Lancaster, 1956. "The General Theory of Second Best," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 24(1), pages 11-32.
    18. Erik Hanushek & F. Welch (ed.), 2006. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 1, number 1, June.
    19. Joshua Angrist & Eric Bettinger & Erik Bloom & Elizabeth King & Michael Kremer, 2002. "Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment," American Economic Review, American Economic Association, vol. 92(5), pages 1535-1558, December.
    20. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications - Books, The World Bank Group, number 2597.
    21. Dubois, Pierre & de Janvry, Alain & Sadoulet, Elisabeth, 2000. "Effects on School Enrollment and Performance of a Conditional Transfers Program in Mexico," IDEI Working Papers 114, Institut d'Économie Industrielle (IDEI), Toulouse, revised Sep 2011.
    22. Hicks, John, 1970. "Elasticity of Substitution Again: Substitutes and Complements," Oxford Economic Papers, Oxford University Press, vol. 22(3), pages 289-296, November.
    23. Felipe Barrera-Osorio & Marianne Bertrand & Leigh L. Linden & Francisco Perez-Calle, 2011. "Improving the Design of Conditional Transfer Programs: Evidence from a Randomized Education Experiment in Colombia," American Economic Journal: Applied Economics, American Economic Association, vol. 3(2), pages 167-195, April.
    24. Sarah Baird & Craig McIntosh & Berk Özler, 2011. "Cash or Condition? Evidence from a Cash Transfer Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(4), pages 1709-1753.
    25. Besley, Timothy & Coate, Stephen, 1991. "Public Provision of Private Goods and the Redistribution of Income," American Economic Review, American Economic Association, vol. 81(4), pages 979-984, September.
    26. Ponce, Juan & Bedi, Arjun S., 2010. "The impact of a cash transfer program on cognitive achievement: The Bono de Desarrollo Humano of Ecuador," Economics of Education Review, Elsevier, vol. 29(1), pages 116-125, February.
    27. David P. Coady & Susan W. Parker, 2004. "Cost‐effectiveness Analysis of Demand‐ and Supply‐side Education Interventions: the Case of PROGRESA in Mexico," Review of Development Economics, Wiley Blackwell, vol. 8(3), pages 440-451, August.
    28. Datar, Ashlesha & Mason, Bryce, 2008. "Do reductions in class size "crowd out" parental investment in education?," Economics of Education Review, Elsevier, vol. 27(6), pages 712-723, December.
    29. Laura B. Rawlings, 2005. "Evaluating the Impact of Conditional Cash Transfer Programs," The World Bank Research Observer, World Bank, vol. 20(1), pages 29-55.
    30. Jishnu Das, 2005. "Reassessing Conditional Cash Transfer Programs," The World Bank Research Observer, World Bank, vol. 20(1), pages 57-80.
    31. Paul Schultz, T., 2004. "School subsidies for the poor: evaluating the Mexican Progresa poverty program," Journal of Development Economics, Elsevier, vol. 74(1), pages 199-250, June.
    32. Ferreira, Francisco H. G. & Filmer, Deon & Schady, Norbert, 2009. "Own and sibling effects of conditional cash transfer programs : theory and evidence from Cambodia," Policy Research Working Paper Series 5001, The World Bank.
    33. de Brauw, Alan & Hoddinott, John, 2011. "Must conditional cash transfer programs be conditioned to be effective? The impact of conditioning transfers on school enrollment in Mexico," Journal of Development Economics, Elsevier, vol. 96(2), pages 359-370, November.
    34. Firouz Gahvari & Enlinson Mattos, 2007. "Conditional Cash Transfers, Public Provision of Private Goods, and Income Redistribution," American Economic Review, American Economic Association, vol. 97(1), pages 491-502, March.
    35. Hanushek, Eric A. & Rivkin, Steven G., 2006. "Teacher Quality," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 2, chapter 18, pages 1051-1078, Elsevier.
    36. Behrman, Jere R & Sengupta, Piyali & Todd, Petra, 2005. "Progressing through PROGRESA: An Impact Assessment of a School Subsidy Experiment in Rural Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 54(1), pages 237-275, October.
    37. Leonardo Bursztyn & Lucas C. Coffman, 2012. "The Schooling Decision: Family Preferences, Intergenerational Conflict, and Moral Hazard in the Brazilian Favelas," Journal of Political Economy, University of Chicago Press, vol. 120(3), pages 359-397.
    38. Erik Hanushek & F. Welch (ed.), 2006. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 2, number 2, June.
    39. Schady, Norbert & Araujo, Maria Caridad, 2006. "Cash transfers, conditions, school enrollment, and child work : evidence from a randomized experiment in Ecuador," Policy Research Working Paper Series 3930, The World Bank.
    40. FranÁois Bourguignon & Francisco H. G. Ferreira & Phillippe G. Leite, 2003. "Conditional Cash Transfers, Schooling, and Child Labor: Micro-Simulating Brazil's Bolsa Escola Program," The World Bank Economic Review, World Bank, vol. 17(2), pages 229-254, December.
    41. Antoine Bommier & Sylvie Lambert, 2000. "Education Demand and Age at School Enrollment in Tanzania," Journal of Human Resources, University of Wisconsin Press, vol. 35(1), pages 177-203.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kitaura, Koji & Miyazawa, Kazutoshi, 2021. "Inequality and conditionality in cash transfers: Demographic transition and economic development," Economic Modelling, Elsevier, vol. 94(C), pages 276-287.
    2. Del Rey, Elena & Estevan, Fernanda, 2013. "Conditional cash transfers and education quality in the presence of credit constraints," Economics of Education Review, Elsevier, vol. 34(C), pages 76-84.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Estevan, Fernanda, 2013. "The impact of conditional cash transfers on public education expenditures: A political economy approach," European Journal of Political Economy, Elsevier, vol. 32(C), pages 268-284.
    2. Richard Akresh & Damien de Walque & Harounan Kazianga, 2013. "Cash Transfers and Child Schooling: Evidence from a Randomized Evaluation of the Role of Conditionality," Economics Working Paper Series 1301, Oklahoma State University, Department of Economics and Legal Studies in Business.
    3. Kitaura, Koji & Miyazawa, Kazutoshi, 2021. "Inequality and conditionality in cash transfers: Demographic transition and economic development," Economic Modelling, Elsevier, vol. 94(C), pages 276-287.
    4. Behrman, Jere R., 2010. "Investment in Education Inputs and Incentives," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4883-4975, Elsevier.
    5. Jacobus de Hoop & Jed Friedman & Eeshani Kandpal & Furio C. Rosati, 2019. "Child Schooling and Child Work in the Presence of a Partial Education Subsidy," Journal of Human Resources, University of Wisconsin Press, vol. 54(2), pages 503-531.
    6. Raymond, Melanie & Sadoulet, Elisabeth, 2003. "Educational Grants Closing the Gap in Schooling Attainment between Poor and Non-Poor," CUDARE Working Papers 25034, University of California, Berkeley, Department of Agricultural and Resource Economics.
    7. Carla Canelas & Miguel Niño-Zarazúa, 2018. "Schooling and labour market impacts of Bolivia's Bono Juancito Pinto," WIDER Working Paper Series wp-2018-36, World Institute for Development Economic Research (UNU-WIDER).
    8. Carla Canelas & Miguel Niño-Zarazúa, 2018. "Schooling and labour market impacts of Bolivia’s Bono Juancito Pinto," WIDER Working Paper Series 036, World Institute for Development Economic Research (UNU-WIDER).
    9. Francesca Marchetta & Tom Dilly, 2019. "Supporting Education in Africa: Opportunities and Challenges for an Impact Investor," Working Papers hal-02288103, HAL.
    10. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications - Books, The World Bank Group, number 2597.
    11. Alejandro J. Ganimian & Richard J. Murnane, 2014. "Improving Educational Outcomes in Developing Countries: Lessons from Rigorous Impact Evaluations," NBER Working Papers 20284, National Bureau of Economic Research, Inc.
    12. Heinrich, Carolyn J., 2007. "Demand and Supply-Side Determinants of Conditional Cash Transfer Program Effectiveness," World Development, Elsevier, vol. 35(1), pages 121-143, January.
    13. Jacobus de Hoop & Furio C. Rosati, 2014. "Cash Transfers and Child Labor," The World Bank Research Observer, World Bank, vol. 29(2), pages 202-234.
    14. Felipe Barrera-Osorio & Leigh L. Linden & Juan E. Saavedra, 2019. "Medium- and Long-Term Educational Consequences of Alternative Conditional Cash Transfer Designs: Experimental Evidence from Colombia," American Economic Journal: Applied Economics, American Economic Association, vol. 11(3), pages 54-91, July.
    15. Orazem, Peter F. & King, Elizabeth M., 2008. "Schooling in Developing Countries: The Roles of Supply, Demand and Government Policy," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 55, pages 3475-3559, Elsevier.
    16. Martin Persson, U. & Alpízar, Francisco, 2013. "Conditional Cash Transfers and Payments for Environmental Services—A Conceptual Framework for Explaining and Judging Differences in Outcomes," World Development, Elsevier, vol. 43(C), pages 124-137.
    17. Kate Ambler & Diego Aycinena & Dean Yang, 2015. "Channeling Remittances to Education: A Field Experiment among Migrants from El Salvador," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 207-232, April.
    18. David K. Evans & Arkadipta Ghosh, 2008. "Prioritizing Educational Investments in Children in the Developing World," Working Papers 587, RAND Corporation.
    19. Brent Robert J., 2013. "A cost-benefit framework for evaluating conditional cash-transfer programs," Journal of Benefit-Cost Analysis, De Gruyter, vol. 4(2), pages 159-180, August.
    20. Schady, Norbert & Araujo, Maria Caridad, 2006. "Cash transfers, conditions, school enrollment, and child work : evidence from a randomized experiment in Ecuador," Policy Research Working Paper Series 3930, The World Bank.

    More about this item

    Keywords

    conditional cash transfers; public education; education quality; unconditional cash transfers; credit constraint; efficiency; welfare;
    All these keywords.

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ott:wpaper:1108e. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Aggey Semenov (email available below). General contact details of provider: https://edirc.repec.org/data/deottca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.