Cumulative Impacts of Conditional Cash Transfer Programs: Experimental Evidence From Indonesia

AUTHORS:

Nur Cahyadi (TNP2K)
Rema Hanna (Harvard Kennedy School, NBER, BREAD)
Benjamin A. Olken (MIT, NBER, BREAD)
Rizal Adi Prima (RMIT University Melbourne)
Elan Satriawan (TNP2K & Universitas Gadjah Mada)
Ekki Syamsulhakim (TNP2K & Universitas Padjadjaran)

ABSTRACT:

Conditional cash transfer (CCT) programs have spread worldwide, and are designed to promote comprehensive human capital investments in children, starting from encouraging pre-natal and maternal care and early childhood health interventions and continuing through incentivizing school attendance. Yet evaluating these claims over more than a few years is hard, as most CCT experiments extend the program to the control group after a short experimental period.

This paper experimentally estimates the impacts of Indonesia’s cash transfer program (PKH) six years after the program launched, using data from about 14,000 households in 360 sub-districts across Indonesia, taking advantage of the fact that treatment and control locations remained
largely intact throughout the period. We find that PKH continues to have large static incentive effects on many of the targeted indicators, increasing usage of trained health professionals for childbirth dramatically and halving the share of children age 7-15 who are not enrolled in school.

Wage labor for 13-15 year olds was reduced by at least one-third. We also begin to observe impacts on outcomes that may require cumulative investments: for example, six years later, we observe large reductions in stunting and some evidence of increased high school completion
rates. The results suggest that CCT investments can have substantial effects on the accumulation of human capital, and that these effects can persist even when programs are operating at largescale without researcher intervention.

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