Transfer program enforcement and children’s time allocation

Abstract

We estimate the enforcement level of conditionalities of two transfer programs and how they affect teenagers' time use, in particular, their school attendance, labor supply, and home production. We develop a structural discrete choice model in which young individuals and their parents decide how to allocate their time, including the decision of whether to attend school. They also choose how many hours to work in the market, time in home production, and leisure. To estimate the model, we use household panel data which combines administrative records and surveys covering the period of 2005-2012 in Uruguay, during which two consecutive CCT programs were introduced with different designs. Our model captures not only the share of individuals who are in fact in studies, working and those who neither study nor work, but also the share and the number of hours in market work and home production, and the GPA distribution. The policy experiments performed indicate that school attendance can be increased by raising the level of enforcement and by changing who in the household receives the cash transfer from the parents to the teenagers.