Dr. Craig McIntosh

Location:
IRPS Deans Conference Room

Contact Name: James Rauch
Contact Phone: (858) 534-2405 Ext.
Contact Email: jrauch@ucsd.edu

Description:
Dr. Craig McIntosh will present Re-examining the Role of Conditionality in Cash Transfer Programs: Randomized Evidence from Malawi. ABSTRACT: The question of whether the observed effects of a conditional cash transfer (CCT) program are the result of the ‘income effect’ associated with the transfer or the ‘price effect’ from the condition remains an important topic of debate. The issue is of much more than academic interest as it has direct implications for effective program design. This paper provides the first experimental evidence on the relative effectiveness of conditional vs. unconditional cash transfers on schooling, using an intervention in Malawi that was specifically designed to address this question. We show that, after one year, the program substantially reduced the dropout rate (from 10.9% to 6.3%) and increased regular school attendance. We note three important findings. First, these treatment effects, on average, did not differ significantly between the randomly assigned conditional and the unconditional (UCT) treatment arms â€" indicating that the impact of the program is composed largely of an ‘income effect’ and a smaller ‘price effect’. Second, while the schooling outcomes were largely unresponsive to random variation in the transfer amounts given to the parents, higher transfers given directly to the schoolgirls led to significantly improved school attendance and progress â€" but only under CCT. Third, girls receiving CCT offers were significantly more likely to get married than those who received UCT offers. We frame these findings in a simple model of the household, within which parents strategically interact with their school-aged daughters to determine schooling and marriage outcomes. Our findings differ from earlier studies on the topic by suggesting that ‘income effects’ might be substantial in CCT programs, at least in low-income African countries.