How do educational transfers affect child labour supply and expenditures? Evidence from Indonesia of impact and flypaper effects.

de Silva, Indunil and Sumarto, Sudarno (2014): How do educational transfers affect child labour supply and expenditures? Evidence from Indonesia of impact and flypaper effects. Published in: Oxford Development Studies , Vol. 43, No. 4 (3 September 2015)

Abstract

This study utilises a large nationally representative household survey of unusual scope and richness from Indonesia to analyse how the receipt of educational transfers, scholarships and related assistance programmes affects the labour supply of children and the marginal spending behaviour of households on children’s educational goods. We found strong evidence of educational cash transfers and related assistance programmes significantly decreasing the time spent by children in income-generating activities in Indonesia. Households receiving educational transfers, scholarships and assistance were also found to spend more at the margin on voluntary educational goods. These results were stronger for children living in poor families. Our results are particularly relevant for understanding the role of cash transfers and educational assistance in middle-income countries where enrolment rates are already at satisfactory levels, but the challenge is to keep the students in school at post-primary levels

• Item Type: MPRA Paper
• Language: English
• Keywords: Child labour, cash transfers, education expenditures and flypaper effects.
• Subjects: D - Microeconomics > D6 - Welfare Economics; H - Public Economics > H4 - Publicly Provided Goods; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I28 - Government Policy; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I38 - Government Policy ; Provision and Effects of Welfare Programs

References

Afridi, F. (2010) Child welfare programs and child nutrition: evidence from a mandated school meal program in india, Journal of Development Economics, 92(2), pp. 152–165. doi:10.1016/j.jdeveco.2009.02.002.

Arze del Granado, F., Fengler, W., Ragatz, A. & Yavuz, E. (2007) Investing in Indonesia’s Education: Allocation, Equity, and Efficiency of Public Expenditures, World Bank Policy Research Working Paper No. 4329 (Washington, DC: World Bank).

Downloaded by [Indunil De Silva] at 18:08 26 April 2015 Banerjee, A. (2003) Educational Policy and the Economics of the Family (Cambridge, MA, USA: Massachusetts Institute of Technology).

Basu, K. & Van, P. K. (1998) The economics of child labour, American Economic Review, 88, pp. 412–427.

Becker, G. S. (1974) A theory of social interactions, Journal of Political Economy, 82(6), pp. 1063–1094.

Becker, G. S. (1981) A Treatise on the Family (Cambridge, MA: Harvard University Press).

Behrman, J. & Hoddinott, J. (2005) Programme evaluation with unobserved heterogeneity and selective implementation: the Mexican progresa impact on child nutrition, Oxford Bulletin of Economics and Statistics, 67(4), pp. 547–569. doi:10.1111/j.1468-0084.2005.00131.x.

Bourguignon, F., Ferreira, F. & Leite, P. (2003) Conditional cash transfers, schooling, and child labor: microsimulating brazil’s bolsa escola program, World Bank Economic Review, 17(2), pp. 229–254. doi:10.1093/ wber/lhg018.

Case, A., Hosegood, V. & Lund, F. (2005) The reach and impact of Child Support Grants: evidence from KwaZulu-Natal, Development Southern Africa, 22(4), pp. 467–482. doi:10.1080/03768350500322925.

Caliendo, M. & Kopeinig, S. (2005) Some Practical Guidance for the Implementation of Propensity Score Matching, Discussion Paper no. 1588 (Bonn: Institute for the Study of Labor (IZA)).

Cameron, L. (2009) Can a public scholarship program successfully reduce school drop-outs in a time of economic crisis? Evidence from Indonesia, Economics of Education Review, 28(3), pp. 308–317. doi:10.1016/j. econedurev.2007.09.013.

Dehejia, R. H. & Wahba, S. (2002) Propensity score-matching methods for nonexperimental causal studies, Review of Economics and Statistics, 84(1), pp. 151–161.

Cigno, A. & Rosati, F. C. (2005) The economics of child labour (Oxford: Oxford University Press).

Das, J. (2004) Equity in Educational Expenditures: Can Government Subsidies Help?, World Bank Working Paper Series 3249 (Washington, DC: The World Bank).

De Silva, I. & Sudarno, S. (2014) Being Healthy, Wealthy and Wise: Dynamics of Indonesian Sub-National Growth and Poverty, TNP2K Working Paper 04-2013 (Jakarta: Tim Nasional Percepatan Penanggulangan Kemiskinan (TNP2K)).

Duflo, E. (2003) Grandmothers and granddaughters: old-age pensions and intrahousehold allocation in south Africa, World Bank Economic Review, 17(1), pp. 1–25.

ECLAC. (2006) Shaping the Future of Social Protection: Access, Financing and Solidarity (LC/G.2294(SES.31/ 3)) (Santiago: United Nations Publication).

Edmonds, E. (2007) Child labor, in: T. P. Schultz & J. Strauss (Eds) Handbook of Development Economics, vol. 4 (Amsterdam: Elsevier Science).

Edmonds, E. V. (2006) Child labor and schooling responses to anticipated income in South Africa, Journal of Development Economics, 81(2), pp. 386–414.

Edmonds, E. V. & Schady, N. (2009) Poverty Alleviation and Child Labor, NBER Working Paper 15345 (Cambridge, MA: National Bureau of Economic Research).

Ersado, L. (2002) Child labor and school decisions in urban and rural areas: cross country evidence, IFPRI, Food Consumption and Nutrition Division, DP No. 145.

Fiszbein, A. & Schady, N. (2009) Conditional Cash Transfers: Reducing Present and Future Poverty (Washington, DC: World Bank).

Galor, O. & Zeira, J. (1993) Income distribution and macroeconomics, Review of Economic Studies, 60(1), pp. 35–124. doi:10.2307/2297811.

Hardjono, J. (2004). Unpublished report for the Asian Development Bank, Manila The Integration of Poverty Considerations into the Nine-year Basic Education Program in Bali and West Nusa Tenggara.

Jacoby, H. (2002) Is there an intrahousehold “flypaper effect”? Evidence from a school Feeding Programme, Economic Journal, 112(476), pp. 196–221.

Jones, G. (2003) Pengamatan Cepat SMERU tentang Permasalahan Pendidikan dan Program JPS, Beasiswa, dan DBO di Empat Provinsi [SMERU Rapid Assessment on Education Problems and Social Safety Net, Scholarship, and Operational Subsidy Programs in Four Provinces] (Jakarta: SMERU Research Institute).

Maluccio, J. A. (2009) Education and child labor: experimental evidence from a Nicaraguan conditional cash transfer program, in: P. Orazem, Z. Tsannatos & G. Sedlacek (Eds) Child Labor and Education in Latin America: An Economic Perspective (New York, NY: MacMillan), pp. 187–206.

Paxson, C. H. (1992) Using weather variability to estimate response of savings to transitory income in Thailand, American Economic Review, 82, pp. 15–33. Education Transfers, Expenditures and Child Labour Supply 21 Downloaded by [Indunil De Silva] at 18:08 26 April 2015

Ravallion, M. & Wodon, Q. (2000) Does child labour displace schooling? Evidence on behavioural responses to an enrollment subsidy, Economic Journal, 110(462), pp. 158–175. doi:10.1111/1468-0297.00527.

Rosenbaum, P. R. & Rubin, D. B. (1983) The central role of the propensity score in observational studies for causal effects, Biometrika, 70(1), pp. 41–55.

Rubin, D. & Thomas, N. (1996) Matching using estimated propensity scores: relating theory to practice, Biometrics, 52(1), pp. 249–264. doi:10.2307/2533160.

Rosati, F. & Rossi, M. (2003) Children’s working hours and school enrollment: evidence from Pakistan and Nicaragua, World Bank Economic Review, 17(2), pp. 283–295.

Schady, N. & Araujo, M. C. (2008) Cash transfers, conditions, school enrolment and child work: evidence form a randomized experiment in Ecuador, Policy Research Working Paper Series 3930 (Washington, DC: The World Bank).

Shi, X. (2012) Does an intra-household flypaper effect exist? Evidence from the educational fee reduction reform in rural China, Journal of Development Economics, 99(2), pp. 459–473. doi:10.1016/j.jdeveco.2012.05.006.

Skoufias, E. & Parker, S. W. (2001) Conditional Cash Transfers and Their Impact on Child Work and Schooling: Evidence from the Progresa Program in Mexico (Discussion Paper 123) (Washington, DC: International Food Policy Research Institute).

Sparrow, R. (2007) Protecting education for the poor in times of crisis: an evaluation of a scholarship programme in Indonesia, Oxford Bulletin of Economics and Statistics, 69(1), pp. 99–122.

Suharti. (2013) Trends in Education Indonesia. Education in Indonesia (Singapore: ISEAS).

Suryadarma, D., Widyanti, W., Suryahadi, A. & Sumarto, S. (2006) From Access to Income: Regional and Ethnic Inequality in Indonesia, Working Paper (Jakarta: SMERU Research Institute).

World Bank. (2013) Spending More or Spending Better: Improving Education Financing in Indonesia (Jakarta: World Bank)