Own and Sibling Effects of Conditional Cash Transfer Programs : Theory and Evidence from Cambodia

41 Pages Posted: 20 Apr 2016

See all articles by Francisco H. G. Ferreira

Francisco H. G. Ferreira

World Bank - Development Research Group (DECRG)

Deon Filmer

World Bank; World Bank - Development Research Group (DECRG)

Norbert Schady

World Bank - Development Research Group

Date Written: July 1, 2009

Abstract

Conditional cash transfers have been adopted by a large number of countries in the past decade. Although the impacts of these programs have been studied extensively, understanding of the economic mechanisms through which cash and conditions affect household decisions remains incomplete. This paper uses evidence from a program in Cambodia, where eligibility varied substantially among siblings in the same household, to illustrate these effects. A model of schooling decisions highlights three different effects of a child-specific conditional cash transfer: an income effect, a substitution effect, and a displacement effect. The model predicts that such a conditional cash transfer will increase enrollment for eligible children - due to all three effects - but have an ambiguous effect on ineligible siblings. The ambiguity arises from the interaction of a positive income effect with a negative displacement effect. These predictions are shown to be consistent with evidence from Cambodia, where the child-specific program makes modest transfers, conditional on school enrollment for children of middle-school age. Scholarship recipients were more than 20 percentage points more likely to be enrolled in school and 10 percentage points less likely to work for pay. However, the school enrollment and work of ineligible siblings was largely unaffected by the program.

Keywords: Access to Finance, Primary Education, Education For All, Tertiary Education, Youth and Governance

Suggested Citation

Ferreira, Francisco H. G. and Filmer, Deon and Schady, Norbert, Own and Sibling Effects of Conditional Cash Transfer Programs : Theory and Evidence from Cambodia (July 1, 2009). World Bank Policy Research Working Paper No. 5001, Available at SSRN: https://ssrn.com/abstract=1437953

Francisco H. G. Ferreira (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
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Washington, DC 20433
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202-473-4382 (Phone)

Deon Filmer

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://go.worldbank.org/MRWPOHRQJ0

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

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

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