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The Demand for Conditional versus Unconditional Cash Transfers for School Attendance in the Brazilian Favelas

Development Challenge

In an effort to achieve the U.N. Millennium Development Goal of universal primary school enrollment, many developing countries have adopted policies to increase school attendance. However, the United Nations reports that 11 percent of primary school-aged children in the developing world do not attend school,1 suggesting inadequate incentive and enforcement mechanisms. One explanation for low attendance is parent-child conflict over the benefits of schooling, as parents often value schooling more than their children. In this case, students may choose to skip classes in the absence of effective parental monitoring. 

One method of monitoring attendance and increasing primary school attendance is through Conditional Cash Transfers (CCTs). CCT programs provide low-income households with supplemental income conditional on their children’s school attendance, simultaneously addressing poverty and income inequality, and incentivizing schooling by allowing parents to better monitor their children.

Context

The setting for this evaluation is the low-income favelas in the Brazilian capital of Brasilia. These neighborhoods are often characterized by poverty, criminal activity, and a lack of essential public services. Despite compulsory education laws in Brazil, over 9 percent of 14-year-old children from the lowest-income households were reported as not being enrolled in school in 2006.2 In 2008, 10 percent of the population aged 15 years and older was non-literate, and the average number of years of schooling for individuals aged 10 and older was 7.1.3 In response, the Brazilian government implemented a CCT program known as Bolsa Escola Vida Melhor.4 At the time of this study, Bolsa Escola provided each beneficiary household Brazilian R$120 per month (approximately USD 74)for each child between the ages of six and 15, conditional on the child attending a minimum of 85 percent of school days that month.  This represents a significant amount of income for beneficiary households, whose monthly income averaged below R$195 per month (approximately USD 120).    

Evaluation Strategy

The primary goal of this study was to examine the extent to which parent-child conflict plays a role in the schooling decisions of low-income households in the favelas of BrasiliaThe authors conducted a four-arm randomized evaluation during June and July 2009, in which 210 Bolsa Escola beneficiary families in Brasilia were randomly selected to participate in a survey. Only families with children aged 13 to 15 who had no older CCT-eligible children were permitted to participate. Parents were offered R$7 or R$10 to take the survey, and compliance was 87 percent. Parents and children participated in the study.  Before being surveyed, families were randomly divided into four treatment groups, described below:

Treatment Group Intervention
Baseline

Parents were asked to choose between their current CCT and an Unconditional Cash Transfer (UCT) of varying sizes. The child would be informed of any change in conditionality.

Don’t Tell Parents were offered the same choices as in the Baseline. However, their child would not be informed about any program change, and thus would not know whether the conditionality had been removed.
Text Message Parents were offered the same choices as in the Baseline. However, they were also offered the option of receiving free cell-phone text messages each time the child missed school regardless of the parents’ choice between conditional and unconditional payments. This gave parents complete information of their child’s attendance pattern regardless of their choice for the cash transfer.
Non-Classroom Parents were offered the same choices between CCTs and UCTs. However, the conditionality would now be on whether the child was present on school grounds during the day, with no obligation to attend classes during the half day when no classes were scheduled. The child was free to do any activity during that part of the day, as long as they remained on school grounds.


Parents were also informed that 5 percent of study participants would be randomly selected to have one of their decisions implemented. Researchers designed the evaluation to indicate the extent to which parents are willing to pay for Conditional versus Unconditional Cash Transfers as a means to monitor their children’s behavior, and to reveal any intra-household conflicts regarding school attendance.

Results and Policy Implications

Baseline treatment

In this group, 82 percent of parents chose a CCT over an Unconditional Cash Transfer of greater amount, and were willing to forego at least R$37 per month to keep conditionality.  Children were significantly less likely to be willing to pay for conditionality.  These results indicate that parents place a high value on their child’s school attendance, and believe that the conditionality can help enforce school attendance.

Don’t tell treatment

When children were unaware that the conditionality on their attendance had been removed, parents exhibited significantly less demand for conditionally. The proportion of parents willing to pay for conditionality decreased to 30 percent compared with 82 percent in the Baseline group.  This suggests that parents value monitoring for their children, who they believe do not value education as highly as they do. 

Text message treatment

When parents were alerted of their child’s attendance status by a text message, and thereby provided monitoring information, they were also significantly less likely to demand conditionality. The proportion of parents who were willing to pay for conditionality decreased to 34 percent compared with 82 percent in the Baseline group.

Non-classroom treatment

Finally, when conditionality is changed from mandating classroom attendance to mandating presence on school grounds only, parents did not significantly decrease their demand for conditionality relative to the Baseline.  The proportion of parents who were willing to pay for conditionality decreased slightly from 82 percent in the Baseline to 68 percent, a difference that was not statistically significant. These results indicate that schooling may have benefits beyond providing in-classroom learning opportunities, such as keeping children off the streets.

The results from all four treatment groups indicate important intergenerational conflicts in schooling decisions and a parental willingness to pay to effectively monitor their children’s school attendance.  This study underscores a need for efficient mechanisms, such as text messaging, to close the information gap between parent and child and provides an additional rationale for adopting CCTs due to the monitoring they provide.  By better informing children of the value of education, policymakers may be able to bridge parent-child differences in schooling preferences. 

Timeline

2009

United Nations Millennium Development Goal Report (2011). United Nations. New York, NY.

PNAD (2006) Pesquisa Nacional por Amostra de Domicilios, Institute Brasileiro de Geografia e Estatisica. Rio de Janiero, RJ.

PNAD (2008) Pesquisa Nacional por Amostra de Domicilios, Institute Brasileiro de Geografia e Estatisica. Rio de Janiero, RJ.

Roughly translated as, “School Stipend, Better Life.”

Approximate market exchange rate at time of study (June to July 2009)

Photo Credit: Pequena Verena