Assistant Professor of Economics, Stanford University
Through a randomized experiment in over 600 poor, rural communities of Morocco, we test whether the demonstrated ability of Conditional Cash Transfers (CCTs) to increase human capital attainment in low and middle income countries hinges on three of their standard features: that they constrain behavior through conditions; that they are paid to mothers rather than fathers; and that they are relatively large. The short answer is no. We find that relatively small cash transfers (equivalent to 4% of annual household expenditures) had large effects on schooling outcomes, irrespective of whether they were conditional on attendance and of whether they were targeted at mothers. We provide evidence that cash transfer programs may affect human capital investments in part through an endorsement effect: in our study context, benefiting from a pro-education government program increased the perceived quality of local schools and parents’ beliefs about the returns to education.