Munich Personal RePEc Archive

The impact of exposure to cash transfers on education and labor market outcomes

Paredes-Torres, Tatiana (2017): The impact of exposure to cash transfers on education and labor market outcomes.

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Abstract

This paper studies the short and long-term effects of exposure to Bono de Desarrollo Humano (BDH), the main unconditional cash transfer program in Ecuador, on young people’s education and labor market outcomes. Using individual administrative panel data and a regression discontinuity design, I estimate the short-term impact of BDH, as well as the differential impact of a long exposure (10 years) versus a short exposure to BDH (five years). In the short-run, treated children experienced gains in enrollment and schooling, but those gains dissipated after five more years of treatment. This explains why after ten years of exposure, treated children aged 18-21 were not more likely to finish high school when compared to similar children who were only treated during the first five years of the program. Regarding labor market outcomes, BDH had a negative but not statistically significant impact on the probability of working among the young children who were treated either during five or ten years and did not increase job opportunities among young adults.

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