Does Money Matter? The Effects of Cash Transfers on Child Development in Rural Ecuador

Abstract

A large body of research indicates that child development is sensitive to early-life environments, so that poor children are at higher risk for poor cognitive and behavioral outcomes. These developmental outcomes are important determinants of success in adulthood. Yet, remarkably little is known about whether poverty-alleviation programs improve children's developmental outcomes. We examine how a government-run cash transfer program for poor mothers in rural Ecuador influenced the development of young children. Random assignment at the parish level is used to identify program effects. Our data include a set of measures of cognitive ability that are not typically included in experimental or quasi-experimental studies of the impact of cash transfers on child well-being, as well as a set of physical health measures that may be related to developmental outcomes. The cash transfer program had positive, although modest, effects on the physical, cognitive, and socioemotional development of the poorest children in our sample.

Unconditional Prenatal Income Supplement and Birth Outcomes

“…There is a growing body of evidence demonstrating improvements to child outcomes associated with increased family income that warrant attention from decision-makers. [56][57][58][59][60][61][62][63] One strength of this study was the use of administrative data to identify all those eligible for HBPB, including those receiving and not receiving the supplement. Combining populationbased databases on program participation with information on family risk factors and service use avoids the problems associated with reporting and recall bias.…”

Cash Transfers and Child and Adolescent Development

“…There was a significant improvement in children's HAZ in Sri Lanka (Himaz 2008), but no effect on young children's HAZ in Ecuador and Zambia (Fernald and Hidrobo 2011;Paxson and Schady 2010;Seidenfeld and others 2014). In South Africa, there was a significant improvement in height for children who had been exposed to the CT program more than 50 percent of the time when they were age 0-35 months (Agüero, Carter, and Woolard 2009).…”

“…Illness or sick days Brazil (Reis 2010) Burkina Faso (Akresh, de Walque, and Kazianga 2016) Malawi (Miller, Tsoka, and Reichert 2010) Mexico (Gertler 2000) Mexico (Gertler 2004) Mexico (Gutiérrez and others 2006) Peru (Perova and Vakis 2009) Mexico, rural areas (Gutiérrez and others 2004) Tanzania, two-year evaluation (Evans, Holtemeyer, and Kosec 2015) Ghana (Handa, Park, and others 2014) Jamaica (Levy and Ohls 2007) Mexico (Fernald, Gertler, and Neufeld 2008) Peru ( Hemoglobin, anemia Mexico (Gertler 2004) Uganda (Gilligan and Roy 2014) Ecuador, poorest quintile, rural (Paxson and Schady 2010) Mexico, urban, ages 6-23 months (Neufeld 2005) Mexico, rural, at one-year, not two-year evaluation (Rivera and others 2004) Mexico (Neufeld and others 2005) Mexico (Fernald, Gertler, and Neufeld 2008) Ecuador (Fernald and Hidrobo 2011) Nicaragua (Maluccio and Flores 2005) Peru (Perova and Vakis 2009)…”

“…Mexico (Fernald, Gertler, and Neufeld 2008) Nicaragua (Macours, Schady, andVakis 2008, 2012) Nicaragua (Barham, Macours, and Maluccio 2013) Uganda (Gilligan and Roy 2014) Ecuador, poorest quintile of rural population (Paxson and Schady 2010) Ecuador, children of rural mothers with no education (Fernald and Hidrobo 2011) Mexico (Fernald, Gertler, and Neufeld 2009) Peru (Andersen and others 2015) Zambia ( Mexico (Gertler 2000) Mexico (Gutiérrez andothers 2004, 2006) Nicaragua ( Malawi, CCT if HIV-negative (Kohler and Thornton 2012) Note: BMI = body mass index; CT = cash transfer; CCT = conditional cash transfer; HAZ = height-for-age z score; HIV/AIDS = human immunodefi ciency virus/acquired immune defi ciency syndrome; STI = sexually transmitted infection; UCT = unconditional cash transfer; WAZ = weight-for-age z score; WHZ = weight-for-height. …”

“…Of the nine studies reviewed in Fernald, Gertler, and Hidrobo (2012) and one more-recent study, five found no effects of CT programs on hemoglobin levels or anemia (Fernald, Gertler, and Neufeld 2008 (Neufeld 2005;Paxson and Schady 2010). Two studies (one in Mexico and one in Uganda) found that CTs led to significant improvements in hemoglobin or anemia rates (Gertler 2004;Gilligan and Roy 2014); one study (Rivera and others 2004) found significant improvements only in the one-year evaluation, but not in the two-year evaluation, when the late intervention group began receiving the CCT.…”