Conditional Cash Transfer, Loss Framing, and SMS Nudges: Evidence from a Randomized Field Experiment in Bangladesh

Conditional cash transfers (CCTs) have become one of the most common policy interventions to increase school attendance, but the cost-effectiveness of such interventions has not attracted the attention it deserves. Hence, in addition to a standard CCT implementation, our rich unique dataset on daily attendance allows us to experimentally study two potential ways to improve the cost-effectiveness of school attendance interventions: (i) SMS information nudges and (ii) loss framing in CCTs. The former provides school attendance information to parents and the latter exploits the endowment effect. Consistent with the existing literature, CCT intervention significantly increases school attendance. Though the difference between gain and loss framing is not statistically significant, the point estimate of the Loss treatment is consistently higher than that of the Gain treatment.The SMS treatment has a modest impact on school attendance but the overall cost of treatment is low. We also find diminishing marginal impact of cash transfer amount on attendance, indicating that the intensive margin matters. Thus, both loss framing and SMS nudges can be considered as alternative cost-effective approaches to promote attendance in schools in developing and less developed economies where resources are typically limited.