Improving the design of conditional transfer programs: Evidence from a Randomized Education Experiment in Colombia

South America

Colombia

Social Protection

Conditional Cash Transfers (CCT)

F Barrera-Osorio, M Bertrand, L Linden, F Perez-Calle

2011

Barrera-Osorio, Felipe, Marianne Bertrand, Leigh L. Linden, and Francisco Perez-Calle. 2011. "Improving the Design of Conditional Transfer Programs: Evidence from a Randomized Education Experiment in Colombia." American Economic Journal: Applied Economics, 3 (2): 167-95.
View publication

Primary Data: available at the journal’s website.

2011

N. A.

May 2005 – March 2006

The objective of the study is to compare three education-based conditional cash transfer designs: a standard design, a design where part of the monthly transfers is postponed until children have to re-enroll in school, and a design that lowers the reward for attendance but incentivizes graduation and tertiary enrollment.

Children had to meet several criteria to be eligible for the program. First, the potential candidates had to have finished grade 5 for the basic-savings experiment and grade 8 for the tertiary experiment and, for both, had to be enrolled but not yet graduated from grade 11. Also, the children’s families had to have been classified into the bottom two categories on Colombia’s poverty index, the SISBEN. To verify the classification, the student had to present an identification card (which the vast majority of students have). The SISBEN categorization of the household was confirmed online by the SED at the time of registration. Finally, to eliminate the possibility that families would move to take advantage of the program, only those households that had been classified by the SISBEN system as living in San Cristobal or Suba before 2004 were eligible to participate in the program.

The authors test two simple variations on the basic model of cash transfers in the large municipality of Bogota, Colombia, both motivated by the need to prevent dropouts from secondary schools and encourage matriculation at tertiary institutions. The first variant aims to relax families’ possible savings constraints, such as those due to commitment problems or imperfect savings institutions. Such savings constraints might be particularly relevant in the education context because of the large expenses families face at the beginning of each new school year. To test the efficacy of this strategy, the authors compare a basic treatment implemented in a manner very similar to PROGRESA (bi-monthly transfers for good attendance) to a “savings treatment” that varies the timing with which the funds are distributed to families. This treatment distributes two-thirds of the “good attendance” funds on the same bi-monthly basis but distributes the remaining funds for all months in a lump sum at the time the students are supposed to re-enroll in school. The other variant directly provides incentives for graduation and tertiary enrollment. In a second experiment, the authors evaluate a “tertiary treatment” that provides children with the same lower bi-monthly transfers as the savings treatment but then guarantees a large payment upon graduation. Students can then receive the payment sooner by matriculating to an institution of higher education.

• School attendance
• School enrollment
• Child labour (work at home and in economic activity)

Propensity Score Matching.

Study design: the assessment of the treatments was divided into two separate experiments located in two very similar localities in Bogota, San Cristobal, and

Suba. Eligible registrants in San Cristobal, ranging from grades 6–to 11, were randomly assigned between a control group, the basic treatment, and the savings treatment. The tertiary treatment was evaluated separately in an experiment in Suba, where students ranging from grade nine through eleven, were randomly assigned to either the tertiary treatment or a control group. Hence, while we can experimentally estimate the causal effect of the tertiary treatment, we can only identify its relative effectiveness compared to the basic (or saving treatment) by relying on a rich set of socio-demographic controls and school-level fixed effects rather than purely random variation. A publicly advertised registration process was held in each locality. Given that there were more interested children than subsidies, the subsidies were allocated to children based on a lottery.
Sample: both experiments for the non-standardized cash transfers were based on an over-subscription model. The city guaranteed enough funds to provide 7,984 students with the subsidies, 6,851 in the basic-savings experiment in San Cristobal and 1,133 in the tertiary experiment in Suba, for three years. In total, 13,433 eligible students were registered for the two experiments: 10,907 for the basic-savings experiment and 2,526 for the tertiary experiment.
Survey Instrument: the baseline survey was a simple self-administered questionnaire that the students filled out in class. The follow-up survey was conducted by researchers (between 98 and 99% location of the original participants). The socio-demographic data collected included indicators for the households’ ownership of assets, access to utilities, possession of durable goods, and physical infrastructure of the house. The child characteristics include age, gender, marital status, years of education, number of years too old (or young) the child is for her grade, and an indicator for whether or not the child is older than normal for her grade. At the family level, we also control for the marital status of the head of household, the head’s age and education level, the number of people in the household, the number of children in the household, the household income, the family’s SISBEN score, and a geographic poverty index called the “estrato.”

The authors find that changing the structure of cash transfers can generate significant increases in re-enrollment without weakening incentives to attend, improvements that are largest for the poorest and most academically at-risk students. The comparison between three education-based conditional cash transfers designs (a standard design, a design where part of the monthly transfers are postponed until children have to re-enroll in school, and a design that lowers the reward for attendance but incentivizes graduation and tertiary enrollment) leads to the conclusion that the two nonstandard designs increased enrollment rates at both the secondary and tertiary levels while delivering the same attendance gains as the standard design.

Child Labour

Households

Local

For those in the earlier grades at the time of registration, there is not much of a change in self-reported primary activities, but there is a relatively large, consistent decrease in the number of hours worked among treated children. The basic and savings treatments reduce the amount worked by about one-third, while the tertiary treatment has a much larger effect, reducing hours worked by more than a half or 0.8 hours in the last week worked.

Changing the structure of cash transfer programs can generate significant increases in re-enrollment without weakening incentives to attend, improvements that are largest for the poorest and most academically at-risk students. All of the designs significantly increase attendance, generating gains of 3 to 5 percentage points. Despite the reduced bi-monthly transfers, the savings and tertiary treatments increase attendance rates by at least as much as the basic treatment. However, these two nonstandard treatments appear superior to the standard CCT payment structure when it comes to increasing enrollment rates at both the secondary and tertiary levels. Within secondary school, just postponing part of the transfer increases re-enrollment by 4 percentage points, while the basic treatment has almost no effect. The savings and tertiary treatments also increase matriculation rates at tertiary institutions. The savings treatment increases enrollment by 9.4 percentage points, while the tertiary treatment proves particularly effective, increasing matriculation by 48.9 percentage points.

Postponing some of the attendance transfers to the time of re-enrollment appears particularly effective for the most at-risk children. The authors also find that participation in CCTs may cause a worrisome reallocation of resources within the household. Siblings (particularly sisters) of treated students attend school less frequently and drop out more often than those in families that received no treatment. Overall, a student, who does not receive the treatment, but whose sibling does, attends 3 percentage points less and is 7.3 percentage points less likely to re-enroll than a similar student whose sibling remains untreated. For girls, the differences are 5.3 and 10.4 percentage points, respectively. This is inconsistent with the view that families use the additional income generated by the CCT program to invest in the education of the nontreated children.