The impact of conditional cash transfers on the amount and type of child labour

Latin America

Nicaragua

Social Protection

Conditional Cash Transfers (CCT)

XV Del Carpio, NV Loayza, T Wada

2016

Del Caprio X.V., Loayza N.V. and Wada T., "The impact of Conditional Cash Transfer on the Amount and Type of Child Labor", World Development, Vol. 80, pp.33-47, 2016
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2016

Attention to the crisis

November 2005/December 2006

The objectives of the program were twofold. First, in the short-term the cash transferred to households was aimed at helping households cope with the adverse effects from the drought, as a safety net mechanism. Second, in the longer term the program was intended to improve the human capital of beneficiary households (through investments in education, training and health). For a subset of beneficiary households the program was also aimed at improving their asset base through the creation of a new economic activity.

The overall geographic area was selected on the basis of being affected by a severe drought and being classified as extreme poor. The beneficiary and control communities from the six eligible municipalities were selected using a lottery process. The criteria for eligibility, within treatment communities, were set using the proxy means methodology and using the national household survey collected in 2001. As a result, over 90% of households in selected treatment communities were offered the program. Households in treatment communities that were not offered the program were excluded because they were better off economically (owned a business, or had a household member employed in a public sector).

The 3,000 randomly selected households that benefited from the program were split into three groups of about 1,000 each. The first benefit package resembles a traditional conditional cash transfer program where all households receive cash transfer conditional on children attending school and health service regularly. The second benefit package also includes the basic package but adds a scholarship for one member of the household (age 16 or above) to attend an occupational training course. The third benefit package includes the basic package but also provides a household grant for the creation of micro business or a new economic and productive activity. Beneficiaries for this package were conditioned on formulating a business plan. The value of cash transfers of the first basic package (third plus business-grant) is approximately 25% (45%) of the average annual household income in the sample communities. The second benefit package did not carry a significant pecuniary value.

• Children’s work: 1. Weekly hours worked in household chores, in farm work, and in skill-forming labor. 2. Number of days worked during past 12 months in farm work, and in skill-forming labor.
• Education: no
• Age range: 18-15 years

Theoretical model of the family decision regarding children-s occupation. Tobit regression procedure. Difference-in-difference approach.

Sample: The sample includes about 3,000 eligible households in the treatment group, and a random sample of about 1,000 eligible households in the communities that were randomly assigned to the control group.
Identification strategy: Randomized assignment.
Survey instrument: Baseline data were collected in May/June 2005, a few months before the first cash transfer payment. The follow-up data were collected in August/September 2006. Attrition between the two surveys was minimal, less than 1.3%, and the take-up rate of the program, of all eligible beneficiaries, was 95%.

The paper finds that that the CCT program had a selective impact on the volume and quality of child labor, reducing it in the aggregate and steering it toward skill-forming activities. Specifically, the program appears to have reduced child labor for household chores and farm work, while increasing it for the non-traditional, skill-forming activities related to commerce and retail.

Child Labour

Households

National

The CCT program had a selective impact on the volume and quality of child labour, reducing it in the aggregate and steering it toward skill-forming activities. Specifically, the program appears to have reduced child labour for household chores and farm work, while increasing it for the non-traditional, skill-forming activities related to commerce and retail.

The program led to improvements in basic skills in reading and writing, arithmetic, and interpersonal relationships.

Children in "basic" and "business"-treated households appear to work, respectively, 1.8 and 0.9 fewer hours per week than those in control households. Children in both in both treatment groups work about 0.6-0.9 fewer hours per week in each chores and farming than children in control group. At the same time, children whose household benefited from the additional business grant appear to work about 1 hour more in skill-forming activities than those who received the basic grant (and those in the control group). In both "basic" and "business"-treated households, boys reduce their farm work more than girls do, and girls decrease their household chores more than boys do.