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.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: cash transfers, regression discontinuity, Ecuador, education, labor market outcomes, long-term effects, short-term effects, Bono de Desarrollo Humano, human capital, poverty, developing countries, regression discontinuity
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities ; Redistributive Effects ; Environmental Taxes and Subsidies; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I22 - Educational Finance ; Financial Aid; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I24 - Education and Inequality; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I25 - Education and Economic Development; 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; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration

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