Evidence from a Cash Transfer Experiment

The Impact Evaluation Series has been established in recognition of the importance of impact evaluation studies for World Bank operations and for development in general. The series serves as a vehicle for the dissemination of findings of those studies. Papers in this series are part of the Bank's Policy Research Working Paper Series. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Conditional Cash Transfer programs are " …the world's favorite new anti-poverty device, " (The Economist, July 29 2010) yet little is known about the specific role of the conditions in driving their success. In this paper, we evaluate a unique cash transfer experiment targeted at adolescent girls in Malawi that featured both a conditional (CCT) and an unconditional (UCT) treatment arm. We find that while there was a modest improvement in school enrollment in the UCT arm in comparison to the control group, this increase is only 43% as large as the CCT arm. The CCT arm also This paper—a product of the Poverty and Inequality Team, Development Research Group—is part of a larger effort in the department to improve the design and cost-effectiveness of cash transfer programs and to assess their impacts for a wider range of policy-relevant outcomes. outperformed the UCT arm in tests of English reading comprehension. The schooling condition, however, proved costly for important non-schooling outcomes: teenage pregnancy and marriage rates were substantially higher in the CCT than the UCT arm. Our findings suggest that a CCT program for early adolescents that transitions into a UCT for older teenagers would minimize this trade-off by improving schooling outcomes while avoiding the adverse impacts of conditionality on teenage pregnancy and marriage. 1 We are grateful to four anonymous referees for helpful feedback on an earlier draft of this paper, as well as seminar and the World Bank for useful discussions. We particularly appreciate the numerous discussions we had with Francisco Ferreira on this topic. We thank everyone who provided this project with great field work and research assistance and are too numerous to list individually. We interpretations, and conclusions expressed in this …