Cumulative Impacts of Conditional Cash Transfer Programs: Experimental Evidence from Indonesia

70 Pages Posted: 4 Jun 2018

See all articles by Nur Cahyadi

Nur Cahyadi

National Team for Acceleration of Poverty Reduction

Rema Hanna

Harvard University - Harvard Kennedy School (HKS)

Benjamin A. Olken

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); Harvard University - Society of Fellows

Rizal Adi Prima

RMIT University - School of Economics, Finance and Marketing

Elan Satriawan

National Team for Acceleration of Poverty Reduction

Ekki Syamsulhakim

National Team for Acceleration of Poverty Reduction

Date Written: May 2018

Abstract

Conditional cash transfer (CCT) programs have spread worldwide, and are designed to promote comprehensive human capital investments in children, starting from encouraging pre-natal and maternal care and early childhood health interventions and continuing through incentivizing school attendance. Yet evaluating these claims over more than a few years is hard, as most CCT experiments extend the program to the control group after a short experimental period. This paper experimentally estimates the impacts of Indonesia’s cash transfer program (PKH) six years after the program launched, using data from about 14,000 households in 360 sub-districts across Indonesia, taking advantage of the fact that treatment and control locations remained largely intact throughout the period. We find that PKH continues to have large static incentive effects on many of the targeted indicators, increasing usage of trained health professionals for childbirth dramatically and halving the share of children age 7-15 who are not enrolled in school. Wage labor for 13-15 year olds was reduced by at least one-third. We also begin to observe impacts on outcomes that may require cumulative investments: for example, six years later, we observe large reductions in stunting and some evidence of increased high school completion rates. The results suggest that CCT investments can have substantial effects on the accumulation of human capital, and that these effects can persist even when programs are operating at large-scale without researcher intervention.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Cahyadi, Nur and Hanna, Rema and Olken, Benjamin A. and Prima, Rizal Adi and Satriawan, Elan and Syamsulhakim, Ekki, Cumulative Impacts of Conditional Cash Transfer Programs: Experimental Evidence from Indonesia (May 2018). NBER Working Paper No. w24670. Available at SSRN: https://ssrn.com/abstract=3190004

Nur Cahyadi (Contact Author)

National Team for Acceleration of Poverty Reduction ( email )

Grand Kebon Sirih Building, 4th floor
Jl Kebon Sirih No 35
Jakarta, 10110
Indonesia

Rema Hanna

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Benjamin A. Olken

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
E52-391
Cambridge, MA 02142
United States
617-253-6833 (Phone)
617-253-1330 (Fax)

National Bureau of Economic Research (NBER) ( email )

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617-588-1407 (Phone)

Harvard University - Society of Fellows

Cambridge, MA 02138
United States

Rizal Adi Prima

RMIT University - School of Economics, Finance and Marketing ( email )

Level 12, 239 Bourke Street
Melbourne, Victoria 3000
Australia

Elan Satriawan

National Team for Acceleration of Poverty Reduction ( email )

Grand Kebon Sirih Building, 4th floor
Jl Kebon Sirih No 35
Jakarta, 10110
Indonesia

Ekki Syamsulhakim

National Team for Acceleration of Poverty Reduction ( email )

Grand Kebon Sirih Building, 4th floor
Jl Kebon Sirih No 35
Jakarta, 10110
Indonesia

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