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

Diana Contreras Suarez and Lisa Cameron

No 10309, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: regression discontinuity design; educational aspirations; time preferences; conditional cash transfers; Colombia (search for similar items in EconPapers)
JEL-codes: D91 I25 I38 O15 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2016-10
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (4)

Published - published as 'Conditional Cash Transfers: Do They Result in More Patient Choices and Increased Educational Aspirations?' in: Economic Development and Cultural Change, 2020, 68 (3), 729 - 761

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