Impact of Conditional Cash Transfers on school enrolement. A case study of secondary education in Bangladesh

Contents

List of Tables

1. Introduction

2. Analytical Framework: Relationship between CCT and School enrolment
What is CCT?
CCT as a demand side intervention: how does it work?
CCT as a supply side initiative: Design and Implementation process
Selecting Target beneficiaries
Payment
The Conditions
Monitoring and evaluation
CCT and its critics
Concluding remarks and synthesis

3. Empirical Analysis
CCT and Education policy of Bangladesh
Conditional Cash Transfer as a demand side intervention: How does it work in secondary education in Bangladesh?
From 1994 to 2008
During 2009 to Now
CCT and supply side initiatives: Design and implementation process in Bangladesh
Selecting Target beneficiaries
Conditions
Payments
Monitoring and Evaluation
Effects of CCT on School Enrolment
The enrolment rate of students in secondary level before introducing CCT
The girls enrolment rate after introducing CCT
Enrolment rate after 2008
CCT and its limitations in context of Bangladesh

4. Conclusion and synthesis

References

Abstract

This study examines the impact of Conditional Cash Transfer (CCT) on school enrolment of secondary education in Bangladesh. By analysing the existing literature the study makes an analytical framework which gives the premises for the understanding that how CCT works on student enrolment. After discussing the demand and supply side initiatives of CCT this paper examine the data of enrolment rate from 1973 to 2012. The data showed that CCT plays major role in increasing the girl’s enrolment in secondary education of Bangladesh. However, the CCT has very little effects on boy’s enrolment. The existing litterateur analysis showed that the reason behind the less impact of boys’ enrolment is socio economic and inbuilt error of the existing programs.

List of Figures

Figure 1. Secondary School Enrolment, Female (% gross)

Figure 2. Secondary School Enrolment, Male (% gross)

Figure 3. Comparison of school enrolment between male and female

List of Tables

Table 1 The name of the projects and their duration and coverage

Acknowledgement

I am profoundly grateful to Professor Bruce Chapman for supervising me from the very beginning to the end while preparing this research project. The supervisor guided me in the right direction by providing me insightful suggestions and remarks. Despite his tireless efforts, any shortcoming or error of the study is solely mine.

I convey my gratitude to Adjunct professor Ian Thynne for guiding me regarding this research project. He taught me how to do the research works in the development field. I was not sure about the finer details of the research project, however, he guided me how to complete the research project.

I also express my gratitude to Alison Cumming Thom for sharing the knowledge and providing the relevant information regarding the research project.

1. Introduction

Conditional cash Transfer (CCT) is a policy tool which has been used for more than two decades for enhancing the enrolment of students in primary and secondary school as well as poverty alleviation of a country. Around the world, 26 countries are implementing CCT program for generating poor household’s income, provide basic health care and increase the school enrolment and ensure the regular school attendance. In this way, the CCT addresses the intergenerational transference of the poverty. Thus, Conditional Cash Transfer has the impact on school enrolment as well as human capital development is empirically justified.

Numerous studies have been done on CCT since 2005, but many questions remain unresolved. Many agree that CCT is not a magic bullet for reducing social inequalities, even the best-designed programs are unable to meet the different types of social protection (WB 2006, Fiszbein et al. 2009). Fiszbein et al. (2009) analyse implementation procedure and interrelations between other programs and CCT but how CCT will work in the different context has also not been identified yet. It is necessary to find the answer of this question. Furthermore, Adato and Hoddinott (2007) also discusse the mechanism, impact and limitations of CCT programs. Simultaneously, they ask about the poor outcome of the CCT program. It is necessary to explore this question to increase the efficiency of the program.

Additionally, though the majority of poor people live in Asia and Sub-Sahara region and CCT are operating in many countries of these areas, still most of the research works on CCT is done in the Caribbean region and Latin America. For example, Coady et al. (2003) investigated that among 102 studies related to CCT, only nine and 15 studies found from Sub-Saharan Africa and Asia respectively, and rest are found from Caribbean and Latin America. Similarly, Milazzo (2009) examin the 109 studies related to CCT program. He reported that 82 research articles from Caribbean areas and Latin America and only four from African country, eight from South Asia and only six from East Asia and Pacific. Moreover, in Bangladesh context, many works have been done regarding the impact of CCT on female enrolment but very little has been done on the impact of CCT on boy’s enrolment. Moreover, no study has been done for seeing the grade wise impact of the enrolment in Bangladesh.

This paper examines the impact of Conditional Cash Transfer on enrolment of secondary education in context of Bangladesh. The country context is Bangladesh has been chosen because this is one of the first implemented countries of the CCT in education arena in the world and two types of CCT program is operating in Bangladesh, one is in Primary education and another one is in secondary education. Additionally, the secondary education level has been chosen because dropout rate in this level is more common in Bangladesh. The cause of the dropout of the students is different for girls and boys. For boys, in secondary school age, boys get engaged in child labour and girls get married. By applying conditional cash transfer in secondary school level, the government can increase the enrolment rate of the students, decrease the child labour and early marriage.

In consonance with the above explained reason, this paper discusses two questions:

1. Analytical question

What is the relationship between CCT and school enrolment?

2. Evaluative Question

What is the impact of CCT on enrolment of secondary education in Bangladesh?

This paper addresses these two questions, firstly, analyse the analytical and empirical relationships of conditional cash transfer and school enrolment based on some existing literatures. Trying to identify comprises of elements such as demand side intervention: how does it work, supply side interventions: design and implementing process and criticism of conditional cash transfer. Then use consistent data to examine the effect of CCT on enrolment of secondary education in Bangladesh.

Secondary data available from United Nations Educational, Scientific and Cultural Organisation (UNESCO) is used for analysing the impact of CCT on enrolment of secondary education. Also data set from the different government project of Bangladesh, Bangladesh Bureau of Educational Information and Statistics (BANBEIS) and World Bank has been used. For examining the impact of CCT, data has been used from 1973 to 2012 which covers 39 years of the period. It is also notable that the data of several years are missing due to the absent of the available data. It interprets the data by the help of graphs to explore the impact of Conditional Cash Transfer on enrolment. The data interpretation does not use any statistical tools, so the relationship between the two components is not absolute but it is based on the premises which have been developed from the existing research works.

This paper is structured into four main segments including the introduction which entice the focus and objective, research question and methodology of the study. Section 2 discusses the analytical framework by analysing the leading articles on CCT and enrolment. It identifies the mechanism, design and implementing process including targeting methods, conditions, payment, and monitoring and evaluation method and explores the criticism of the programs. Section 3 is the empirical analysis with three parts. Firstly, discuss the existing stipend program and education policies in Bangladesh. Secondly, discuss the present design and implementation process and their limitations in Bangladesh perspective based on the existing literature which has been discussed in analytical framework. In the third section, the data set to examine the impact of CCT on enrolment in secondary education in Bangladesh and in the last part will discuss the limitations of the CCT program in the country context. Section 4 of this paper, reviews the analytical framework, empirical analysis and summarises the key findings of the paper and present suggestions for future work.

2. Analytical Framework: Relationship between CCT and School enrolment

To explore the impact of CCT on school enrolment, this section introduces a theoretical lens by examining the existing literature. It discusses the definition of CCT, demand side intervention: how does it work, supply side intervention such as the design and implementation process. It also discusses the criticism of the CCT. As a whole, this section looks how CCT affect the enrolment of students in the school.

What is CCT?

Conditional Cash Transfer program is the policy instrument which use for the reduction of the poverty through strengthening the human capital development. Among the others social safety net programs, conditional cash transfer program pursues to find out a long term solution by investing in education and health. According to Baird et al. (2011), it has two objectives, it provides poor households a minimum income and reduces poverty for the short term and invest in education and health which gives the long term effect. Rawlings and Rubio (2005) stated that CCT is the specific program which gives money to the poor for the basic health or for regular attendance of the school. CCT is an important safety protection policy and there are many evidences showed that it gave better lives to many poor people (WB, cited in Baird et al. 2010, p. 55).

Conditional Cash Transfer ‘a magic bullet in development’ first introduced in before one decade in Mexico, Brazil and Bangladesh and now this policy becomes the central instruments for combating inequality and poverty reduction in approximately 20 countries in full scale and 20 other countries showed interest to introduce in their country. These programs are mostly found in Latin America and Asia and recently African countries are showing the interest to implement this program in their country for reducing inequality and poverty (Adato and Hoddinott 2007, p.1).

CCT as a demand side intervention: how does it work?

Conditional Cash Transfer is a demand-side intervention which is a perfect response to the failure of supply side interventions for instances establishment of hospitals and schools. It works in two ways; it provides cash to the beneficiaries for income generation and imposes the condition for preventing the perverse behaviour of the recipients.

Schools and hospitals are the expensive supply side intervention which poor households cannot afford. Though CCT is not the substitute of the high quality supply side intervention but at least it can address the insufficiency of the poor people (Rawlings and Rubio 2005, p. 36). Comparison of cost-benefit analysis between CCT and supply-side intervention show that CCT as a demand side intervention can target the specific population who are out of school presently. On the other hand, supply side interventions target the students who are already in the school, provide them new school or who have the ability to get admission in the school. In addition demand side intervention ensure students to remain in the school by and then transfer cash to the beneficiaries whereas supply-side intervention allocates their funds in advance and hoped students will remain in the school. In demand side intervention parents get benefits instantly rather than to wait for the future return those children will earn when they become the adult (Orazem et al 2007, p. 23). Moreover, this demand side intervention help in reducing the dropout rate of the students while the supply side intervention has very little effect on this outcome. Glewwe and Olinto (2004) showed that Honduras’s Family Allowances Program (PRAF), decrease dropout rate by 2-3 percentage points.

The mechanism behind how does the conditional cash transfer works on increasing enrolment is that it targets the poor households and transfer cash to them and imposes condition on the receipts behaviour for better outcomes (Fiszebein et al 2009, p. 31). Firstly, CCT has the opportunity cost in terms of ‘forgone alternative public investment’ (Fiszebein et al 2009, p.8). Cash in parents hand insists parents to send their children to the school rather sending them to the work. The credit constrained households are unable to make any investment in their child education. Becker and Tomes (1994) showed that if people are ‘credit constrained’, they will invest little for the schooling of the children which one is an intergenerational transfer as a form of human capital but not as a wealth. Households which are not credit constrained they will invest for the schooling of children and can make the intergenerational transfer.

Cash addresses credit constraints directly. Although market is the main driver for the reduction of the poverty but sometimes market alone cannot reduce the poverty alone. At times, public policy can be major part for correcting the market failure and redistribution of wealth to the poor can be an effective tool for the government to correct the market failure. In these programs, government give lump sum cash to the poor and in return to this transfer, poor receipts conduct some actions such as enrol their children to the school and maintain the attendance in the school. During this time, simple redistribution of the limited resources may reduce the efficiency costs.

Secondly, in conditional cash transfer program, conditions are applied to the beneficiaries. Though direct cash transfer gives the opportunity of income to the poor households but it can create negative effects on recipients (Fiszbein et al. 2009). As a result, by applying condition can impose constraints for correcting the perverse behaviour of the poor. According to Fiszbein et al (2009), ‘conditional cash transfers make payments to poor households on the condition as a result; households can invest in the human capital of their children in certain specified ways’ (p.66).

Conditions-constrained cash transfer has three conceptual arguments. Adato and Hoddinott (2007) have presented three arguments which support the conditionality. First one associated with externalities which related to certain kinds of human capital development investment. For example, parents may not be interested in educating their daughters and thus they will not invest in girl’s education. However, society will be benefitted from the girl’s education. Conditionality is an effective tool for increasing investment in girl’s education. Secondly, conditionality can be state legitimating tool for changing the socioeconomic biases. For instance, in many societies greater power (such as father) impose restriction of schooling on lesser power (such as daughter) and conditionality helps in changing this behaviour. Thirdly, conditionality helps in overcoming the probable stigma related to welfare benefit (p.3).

CCT as a supply side initiative: Design and Implementation process

The efficiency of this program depends on how supply side interventions such as implementation process are designed. This program requires specific targeting tool, enough cash transfer and strong monitoring and evaluation system. Specific targeting tool target the specific beneficiaries, enough amount encourage parents to send their child to schools instead of send them to work and strong monitoring and evaluation system restrict the corruption and mismanagement of the project.

Selecting Target beneficiaries

The first and most crucial question is the selecting the beneficiaries. According to Fiszbein et al (2009), ‘a CCT should be designed to target poor households that underinvest in the human capital of their children’ (p.22). This is important for maximize the human capital development and poverty alleviation through limited resources. Paes-Sousa (2013) reported four types of targeting mechanisms are used for maximizing the accuracy of selecting beneficiaries. These targeting mechanisms are categorical, geographic, means testing and community validation (Briere and Rawlings 2006). Geographic targeting is the first step of selecting the beneficiaries. It identifies the areas where high density of poverty, vulnerability and malnutrition are present. It selects the areas where demand-side intervention is needed to assure the access to education and health (Briere and Rawlings 2006, p.13). Categorical targeting restricts the access of the households with some demographic characteristics. Means testing is a tool which is used for selecting the poor households. It collects information of the applicants and justify where they are eligible or not. Proxy means testing, Multidimensional Poverty Index and Community validation are widely used in different countries for selecting the poor people. It is said that though the all that targeting measure combine can improve the selecting process but errors of inclusion and exclusion cannot be removed completely (Paes-Sousa 2013, p. 29).

Payment

Appropriate cash amount, identifying payee and improved payment system is also important for the successful of the program. It needs to offer a certain amount of payment which is adequate to meet the opportunity cost of not to go to work and alter the behaviour which can fulfil the objective of the program. The amount of cash and the fraction of benefits are main determinants of this program. According to Fiszbein et al (2009), ‘the difference of these two values may be a result of behavioural changes by CCT beneficiaries, which partly offset the value of the transfer itself.’ (p. 114). Another important feature is who are going to be payee. In some programs guardian especially the mother of the children are the payee (Fiszbein et al. 2009, p.82). Improved payment distribution system is also very important for to reach the targeted beneficiaries. Most of these beneficiaries had not taken part in the financial activities previously. By using the debit cards many countries like Argentina, Brazil and Mexico have improved their payment system. Many countries introduced internet database system which adds great accountability to the program (Briere and Rawlings 2006, p. 12).

The Conditions

The efficiency of CCT depends on which conditions are applied and the level of punishment for the households of non-compliance. Evidence from different countries showed that only cash component is not responsible for the successful implementation of the CCT program. Right conditions are important especially for the increase of the school enrolment of the students. The influence of CCT on educational enrolment depends on its ability to affect the behaviour of the individual. The right conditions and right way to enforcement is necessary for the effectiveness of the program and for the enhancement of the service delivery among the poor people. Monetary incentives are important for the increasing of the enrolment but for retaining the students in the schools and for the best outcomes of the program condition is important (Fiszbein et al 2009). Usually, in different country for school enrolment program following kind of conditions are applied such ‘as minimum attendance rates of 85 percent are required in Brazil’s Bolsa Família and a similar restriction applies in Mexico’s Oportunidades’ (Briere and Rawlings 2006, p. 10). However, not only the conditions can improve the efficiency it required proper monitoring and enforcement process.

Monitoring and evaluation

The right condition and appropriate payment system without proper monitoring and evaluating system are not adequate for making this program successful. As CCT involves in distributing cash so it can be criticised that political manipulation can in case of selection process. As a result strong monitoring and evaluation are necessary throughout the program implementation process. It can be done through the frequent collections of data on project input, output, output and impacts. The CCT can be credible and politically viable through the proper monitoring and evaluation system (Paes-Sousa 2013, p. 29). For monitoring it required strong program personnel and management information system (MIS) and evaluation should be done by the third party.

CCT and its critics

Conditional cash transfer has criticised by many scholars that it has the negative impact on the quality of education and administrative cost is very high. Though these programs increase the school attendance in primary level and helps in transiting students from primary to secondary level but it is ambiguous what students are learning from the school, (Reimers et al. 2006, p.10). No studies show that CCT programs have great influence on the quality of education. Very few programs may have complementary components for improvement of quality of education but they are poorly constructed and implemented. Most of the studies found that most CCT program implemented schools are situated in the poor rural areas and the quality of education is very low. The data analysis from 12 countries of Latin America showed that students of rural areas performed very low then the students of large or medium sized cities. In addition, compare to other OECD countries, educational performance of secondary school’s students of Mexico and Brazil who have CCT programs in their schools are very low. The basic literacy rate of these schools is very low compared to other developing countries of the OECD countries. For instances, in Brazil and Mexico the percentage of unable to read is 19% and 12.5% respectively, whereas this number is 2.2% in Spain and 6.9% in Portugal (Reimers et al 2006, p.30). Additionally, if the supply of schools is fixed, then the increase in enrolment can make school more congested and overcrowd the classroom and raise the teacher-student ratio (Baez and Camacho 2011, p. 2).

Moreover, some argued that CCT is more expensive than any other safety net programs of government. For example, Progressa of Mexico needs to spend 1.34 dollar administrative costs for paying one dollar benefits to beneficiaries (Adato and Hoddinott 2007, p. 3). Though Briere and Rawling (2007) showed that established costs are amortized over the time but Adato and Hoddinott (2007) showed the contrasting picture. They found after three years of implementation, Progressa’s operation and administration costs had reduced only five cents for transferring one dollar to beneficiaries (p. 3). For the effectiveness of the program targeting beneficiaries, modern payment system, monitoring and evaluation all are components are very important. All of these components are very costly, for instances, in Honduras, the monitoring component of CCT cost nine percent of the total budget (Adato and Hoddinott 2007). Reducing costs on some of these components might decrease the administrative costs but the performance of the program may become weak and consequently, the saving of cost will be counterproductive.

Concluding remarks and synthesis

By analysing the existing literature, this study revealed that, despite few negative criticisms, the conditional cash transfer has positive impact on school enrolment. Many countries in the world have increased student’s enrolment in primary and secondary education by generating income to the poor households and imposing conditions on beneficiaries. The next section will analyse the impact of conditional cash transfer in secondary education in the context of Bangladesh. It will also discuss the implementation design in the country context and will analyse the design as analytical framework. Based on above discussion, the impact of CCT on enrolment in education is examined by using data set from the United Nations educational, Scientific and Cultural Organisation (UNESCO), Bangladesh Bureau of Educational Information and Statistics (BANBEIS) and World Bank.

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