Evaluation of the impact of conditional cash transfers on schooling : an experimental analysis of Honduras" PRAF program

Two interventions were examined, a "demand" intervention that provided families with monetary payments if their children were enrolled in (and regularly attended) primary school, and a supply side incentive that provided assistance to schools. Econometric estimates suggest that the demand side intervention of the PRAF II program increased enrollment rates by 1-2 percentage points, reduced the dropout rate by 2-3 percentage points, increased school attendance (conditional on enrollment) by about 0.8 days per month, and increased annual promotion rates to the next grade by 2-4 percentage points. There was no effect on child labor force participation. Some of these impacts appear to be negatively correlated with household income, which implies that they are stronger for poorer households. Simulation results indicate that, over the long run, the demand intervention will increase the years of schooling of 14 year old children by about 0.7 years. In contrast, the supply side intervention has had no effect on any outcomes, which is not surprising given that most parts of it were never implemented. (Author abstract)