Cash transfers: New research finds combining demand and supply-side incentives improves longer-term

phys.org | 8/2/2018 | Staff
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Conditional cash transfers are popular programs used to reduce poverty by making social assistance conditional for recipients, often requiring school attendance and participation in health services. Since the late 1990s, such programs have become popular among governments and non-governmental organizations (NGOs) across the world. Evaluations of the near-term effects of such programs have found strong positive impacts on child health, nutrition, and education.

A new study led by Andrés Ham, a recent doctoral graduate of the Department of Agricultural and Consumer Economics at the University of Illinois and co-authored by Hope Michelson, assistant professor in agricultural and consumer economics, investigates the longer-term impacts of a conditional cash transfer program in Honduras, studying effects on municipal-level outcomes a decade after implementation.

Honduran - Family - Allowances - Program - Feature

The Honduran Family Allowances program was implemented with a special feature, in which the implementers randomly assigned three types of incentives: demand, supply, or both. Some people received payments conditional on school attendance and participation in health services, others lived in districts where schools and health clinics received direct support to invest in training education and health workers and to improve clinic and school facilities. Some participants received both conditional payments and exposure to such service improvements.

While conditional cash transfers are widely implemented in many countries, one designed to measure the effectiveness of different forms of delivery is rare. Ham and Michelson evaluated the consequences of this particular program in Honduras, focusing on two opportunities the program design made possible: to study the longer-term effects of these programs on educational and labor market outcomes and to assess whether the form of the investment makes a difference in those longer-term effects.

Michelson - Program - Impact

Michelson says that it is critical to understand the program's longer-term impact.

"We wanted to know what were the broader implications and bigger effects if...
(Excerpt) Read more at: phys.org
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