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Cash Transfers, Behavioral Changes, and Cognitive Development in Early Childhood: Evidence from a Randomized Experiment

50 Pages Posted: 20 Apr 2016  

Karen Macours

Paris School of Economics (PSE)

Norbert Schady

World Bank - Development Research Group

Renos Vakis

The World Bank

Multiple version iconThere are 2 versions of this paper

Date Written: October 1, 2008

Abstract

A variety of theories of skill formation suggest that investments in schooling and other dimensions of human capital will have lower returns if children do not have adequate levels of cognitive and social skills at an early age. This paper analyzes the impact of a randomized cash transfer program on cognitive development in early childhood in rural Nicaragua. It shows that the program had significant effects on cognitive outcomes, especially language. Impacts are larger for older pre-school age children, who are also more likely to be delayed. The program increased intake of nutrient-rich foods, early stimulation, and use of preventive health care-all of which have been identified as risk factors for development in early childhood. Households increased expenditures on these inputs more than can be accounted for by the increases in cash income only, suggesting that the program changed parents' behavior. The findings suggest that gains in early childhood development outcomes should be taken into account when assessing the benefits of cash transfer programs in developing countries. More broadly, the paper illustrates that gains in early childhood development can result from interventions that facilitate investments made by parents to reduce risk factors for cognitive development.

Keywords: Health Monitoring & Evaluation, Educational Sciences, Youth and Governance, Primary Education, Street Children

Suggested Citation

Macours, Karen and Schady, Norbert and Vakis, Renos, Cash Transfers, Behavioral Changes, and Cognitive Development in Early Childhood: Evidence from a Randomized Experiment (October 1, 2008). World Bank Policy Research Working Paper No. 4759. Available at SSRN: https://ssrn.com/abstract=1293172

Karen Macours (Contact Author)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Norbert Schady

World Bank - Development Research Group ( email )

1818 H Street NW
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/nschady

Renos Vakis

The World Bank ( email )

1818 H Street NW
Washington, DC 20043
United States

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