IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp10309.html
   My bibliography  Save this paper

Conditional Cash Transfers: Do They Change Time Preferences and Educational Aspirations?

Author

Listed:
  • Contreras Suarez, Diana

    (University of Melbourne)

  • Cameron, Lisa A.

    (University of Melbourne)

Abstract

Conditional Cash Transfer programs are designed to increase human capital in poorer families. They do this directly through incentives and conditions. A further way these programs may influence household decisions is through impacts on preferences. Preferences may change as a result of new habit formation, information received through the program or by the relaxation of budget constraints which gives households a greater ability to look beyond their daily needs to plan for the future. Using a regression discontinuity design we test whether a large CCT program in Colombia affects the time preferences of participating households and aspirations for their children's education. We find that it does not. Thus, the positive impacts identified in previous studies appear to be driven by the ongoing receipt of the cash transfers and the associated conditions. Hence if the transfers were to stop, program benefits would likely be limited to those obtained during the program.

Suggested Citation

  • Contreras Suarez, Diana & Cameron, Lisa A., 2016. "Conditional Cash Transfers: Do They Change Time Preferences and Educational Aspirations?," IZA Discussion Papers 10309, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10309
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp10309.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Baez, Javier E. & Camacho, Adriana, 2011. "Assessing the Long-term Effects of Conditional Cash Transfers on Human Capital: Evidence from Colombia," IZA Discussion Papers 5751, Institute of Labor Economics (IZA).
    2. Bart H.H. Golsteyn & Hans Grönqvist & Lena Lindahl, 2014. "Adolescent Time Preferences Predict Lifetime Outcomes," Economic Journal, Royal Economic Society, vol. 124(580), pages 739-761, November.
    3. Leandro Siqueira Carvalho, 2010. "Poverty and Time Preference," Working Papers 759, RAND Corporation.
    4. Black, Sandra & Devereux, Paul J. & Majlesi, Kaveh & Lundborg, Petter, 2015. "On the Origins of Risk-Taking," CEPR Discussion Papers 10694, C.E.P.R. Discussion Papers.
    5. Zumbühl, Maria & Dohmen, Thomas & Pfann, Gerard A., 2013. "Parental Investment and the Intergenerational Transmission of Economic Preferences and Attitudes," IZA Discussion Papers 7476, Institute of Labor Economics (IZA).
    6. Gary S. Becker & Casey B. Mulligan, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(3), pages 729-758.
    7. Orazio Attanasio & Emla Fitzsimons & Ana Gomez & Martha Isabel Gutiérrez & Costas Meghir & Alice Mesnard, 2010. "Children's Schooling and Work in the Presence of a Conditional Cash Transfer Program in Rural Colombia," Economic Development and Cultural Change, University of Chicago Press, vol. 58(2), pages 181-210, January.
    8. Chiapa, Carlos & Garrido, José Luis & Prina, Silvia, 2012. "The effect of social programs and exposure to professionals on the educational aspirations of the poor," Economics of Education Review, Elsevier, vol. 31(5), pages 778-798.
    9. Leandro Carvalho, 2010. "Poverty and Time Preference," Working Papers WR-759, RAND Corporation.
    10. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
    11. Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2006. "Preferences, Poverty and Politics: Experimental and Survey Data from Vietnam," Levine's Bibliography 321307000000000054, UCLA Department of Economics.
    12. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2012. "The Intergenerational Transmission of Risk and Trust Attitudes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 645-677.
    13. Alessandra Fogli & Raquel Fernandez, 2009. "Culture: An Empirical Investigation of Beliefs, Work, and Fertility," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 146-177, January.
    14. Luis Rubalcava & Graciela Teruel & Duncan Thomas, 2009. "Investments, Time Preferences, and Public Transfers Paid to Women," Economic Development and Cultural Change, University of Chicago Press, vol. 57(3), pages 507-538, April.
    15. Bruno Martorano & Sudhanshu Handa & Carolyn Halpern & Harsha Thirumurthy, 2014. "Subjective Well-being, Risk Perceptions and Time Discounting: Evidence from a large-scale cash transfer programme," Papers inwopa717, Innocenti Working Papers.
    16. Kirby, Kris N. & Godoy, Ricardo & Reyes-Garcia, Victoria & Byron, Elizabeth & Apaza, Lilian & Leonard, William & Perez, Eddy & Vadez, Vincent & Wilkie, David, 2002. "Correlates of delay-discount rates: Evidence from Tsimane' Amerindians of the Bolivian rain forest," Journal of Economic Psychology, Elsevier, vol. 23(3), pages 291-316, June.
    17. Das, Mausumi, 2007. "Persistent inequality: An explanation based on limited parental altruism," Journal of Development Economics, Elsevier, vol. 84(1), pages 251-270, September.
    18. Michal Bauer & Julie Chytilová, 2010. "The Impact of Education on Subjective Discount Rate in Ugandan Villages," Economic Development and Cultural Change, University of Chicago Press, vol. 58(4), pages 643-669, July.
    19. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-209, January.
    20. Mark Dean & Anja Sautmann, 2014. "Credit Constraints and the Measurement of Time Preferences," Working Papers 2014-1, Brown University, Department of Economics.
    21. Lisa Cameron & Manisha Shah, 2015. "Risk-Taking Behavior in the Wake of Natural Disasters," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 484-515.
    22. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    23. Anderson, C Leigh & Dietz, Maya & Gordon, Andrew & Klawitter, Marieka, 2004. "Discount Rates in Vietnam," Economic Development and Cultural Change, University of Chicago Press, vol. 52(4), pages 873-887, July.
    24. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications - Books, The World Bank Group, number 2597.
    25. Lührmann, Melanie & Serra-Garcia, Marta & Winter, Joachim, 2015. "Teaching teenagers in finance: Does it work?," Journal of Banking & Finance, Elsevier, vol. 54(C), pages 160-174.
    26. Tomomi Tanaka & Colin F Camerer & Quang Nguyen, 2006. "Poverty, politics, and preferences: Field Experiments and survey data from Vietnam," Levine's Bibliography 122247000000001099, UCLA Department of Economics.
    27. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
    28. McCrary, Justin, 2008. "Manipulation of the running variable in the regression discontinuity design: A density test," Journal of Econometrics, Elsevier, vol. 142(2), pages 698-714, February.
    29. Zumbühl, M.A. & Dohmen, T.J. & Pfann, G.A., 2013. "Parental investment and the intergenerational transmission of economic preferences," ROA Research Memorandum 011, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    30. Orazio Attanasio & Katja Kaufmann, 2009. "Educational Choices, Subjective Expectations, and Credit Constraints," NBER Working Papers 15087, National Bureau of Economic Research, Inc.
    31. Brian C. Cadena & Benjamin J. Keys, 2015. "Human Capital and the Lifetime Costs of Impatience," American Economic Journal: Economic Policy, American Economic Association, vol. 7(3), pages 126-153, August.
    32. Lawrance, Emily C, 1991. "Poverty and the Rate of Time Preference: Evidence from Panel Data," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 54-77, February.
    33. Chuang, Yating & Schechter, Laura, 2015. "Stability of experimental and survey measures of risk, time, and social preferences: A review and some new results," Journal of Development Economics, Elsevier, vol. 117(C), pages 151-170.
    34. Carvalho, Leandro S. & Prina, Silvia & Sydnor, Justin, 2016. "The effect of saving on risk attitudes and intertemporal choices," Journal of Development Economics, Elsevier, vol. 120(C), pages 41-52.
    35. Sarah Baird & Francisco H.G. Ferreira & Berk Özler & Michael Woolcock, 2014. "Conditional, unconditional and everything in between: a systematic review of the effects of cash transfer programmes on schooling outcomes," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 6(1), pages 1-43, January.
    36. Benjamin Volland, 2013. "On the intergenerational transmission of preferences," Journal of Bioeconomics, Springer, vol. 15(3), pages 217-249, October.
    37. Robert Jensen, 2010. "The (Perceived) Returns to Education and the Demand for Schooling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(2), pages 515-548.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Claudio A. Agostini & Marcela Perticara & Javiera Selman, 2023. "Tackling Vulnerable Households through a Working Tax Credit Scheme: A Feasible Alternative to Cash Transfers," Hacienda Pública Española / Review of Public Economics, IEF, vol. 245(2), pages 119-155, June.
    2. García, Sandra & Harker, Arturo & Cuartas, Jorge, 2019. "Building dreams: The short-term impacts of a conditional cash transfer program on aspirations for higher education," International Journal of Educational Development, Elsevier, vol. 64(C), pages 48-57.
    3. Malhi, Fareena Noor, 2020. "Unconditional Cash Transfers: Do They Impact Aspirations of the Poor?," MPRA Paper 102509, University Library of Munich, Germany.
    4. Xuan Huo & Huawei Han & Qin Gao, 2023. "Does Welfare Participation Affect Adolescent Educational Aspiration? Evidence from Panel Data in China," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 16(3), pages 1171-1202, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dawoon Jung & Tushar Bharati & Seungwoo Chin, 2021. "Does Education Affect Time Preference? Evidence from Indonesia," Economic Development and Cultural Change, University of Chicago Press, vol. 69(4), pages 1451-1499.
    2. Mazzutti, Caio Cícero Toledo Piza da Costa, 2016. "Three essays on the causal impacts of child labour laws in Brazil," Economics PhD Theses 0616, Department of Economics, University of Sussex Business School.
    3. Tim Friehe & Markus Pannenberg, 2020. "Time preferences and political regimes: evidence from reunified Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 349-387, January.
    4. Preuss, Malte, 2021. "Intra-individual stability of two survey measures on forward-looking attitude," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 201-227.
    5. Hızıroğlu Aygün, Aysun & Kırdar, Murat Güray & Koyuncu, Murat & Stoeffler, Quentin, 2024. "Keeping refugee children in school and out of work: Evidence from the world's largest humanitarian cash transfer program," Journal of Development Economics, Elsevier, vol. 168(C).
    6. Dasgupta, Utteeyo & Gangadharan, Lata & Maitra, Pushkar & Mani, Subha, 2017. "Searching for preference stability in a state dependent world," Journal of Economic Psychology, Elsevier, vol. 62(C), pages 17-32.
    7. Wang, Mei & Rieger, Marc Oliver & Hens, Thorsten, 2016. "How time preferences differ: Evidence from 53 countries," Journal of Economic Psychology, Elsevier, vol. 52(C), pages 115-135.
    8. Doepke, Matthias & Zilibotti, Fabrizio, 2014. "Culture, Entrepreneurship, and Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 0, pages 1-48, Elsevier.
    9. Jiang, Wei & Lu, Yi & Xie, Huihua, 2020. "Education and mental health: Evidence and mechanisms," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 407-437.
    10. Jules Gazeaud & Claire Ricard, 2021. "Conditional cash transfers and the learning crisis: evidence from Tayssir scale-up in Morocco," NOVAFRICA Working Paper Series wp2102, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    11. Sequeira, Sandra & Spinnewijn, Johannes & Xu, Guo, 2016. "Rewarding schooling success and perceived returns to education: Evidence from India," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 373-392.
    12. Tomomi Tanaka & Colin F. Camerer & Quang Nguyen, 2006. "Preferences, Poverty and Politics: Experimental and Survey Data from Vietnam," Levine's Bibliography 321307000000000054, UCLA Department of Economics.
    13. García, Sandra & Harker, Arturo & Cuartas, Jorge, 2019. "Building dreams: The short-term impacts of a conditional cash transfer program on aspirations for higher education," International Journal of Educational Development, Elsevier, vol. 64(C), pages 48-57.
    14. Paredes, Tatiana, 2017. "The long-term effects of cash transfers on education and labor market outcomes," MPRA Paper 88809, University Library of Munich, Germany, revised 03 Sep 2018.
    15. Beuermann, Diether & Ramos Bonilla, Andrea & Stampini, Marco, 2024. "Can Conditional Cash Transfers Alter the Effectiveness of Other Human Capital Development Policies?," IDB Publications (Working Papers) 13484, Inter-American Development Bank.
    16. Dietmar Fehr & Yannick Reichlin, 2021. "Status, Control Beliefs, and Risk-Taking," CESifo Working Paper Series 9253, CESifo.
    17. Kunt Šimunović, Pınar, 2024. "Education increases patience: Evidence from a change in a compulsory schooling law," Economics & Human Biology, Elsevier, vol. 53(C).
    18. De Paola, Maria & Scoppa, Vincenzo, 2015. "Procrastination, academic success and the effectiveness of a remedial program," Journal of Economic Behavior & Organization, Elsevier, vol. 115(C), pages 217-236.
    19. Volker Schöer & Debra Shepherd, 2013. "Compulsory tutorial programmes and performance in undergraduate microeconomics: A regression discontinuity design," Working Papers 27/2013, Stellenbosch University, Department of Economics.
    20. Gurgand, Marc & Lorenceau, Adrien & Mélonio, Thomas, 2023. "Student loans: Credit constraints and higher education in South Africa," Journal of Development Economics, Elsevier, vol. 161(C).

    More about this item

    Keywords

    regression discontinuity design; educational aspirations; time preferences; conditional cash transfers; Colombia;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp10309. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.