Child Schooling and Child Work in the Presence of a Partial Education Subsidy

Abstract

Could a partial subsidy for child education increase child labor? Using data from the randomized evaluation of a conditional cash transfer program (CCT) in the Philippines, we find that children who were neither in school nor work in the absence of the program not only increased school participation but also increased work for pay. We show suggestive evidence that, because the cash transfer only provided a partial schooling subsidy, children worked to cover the shortfall in schooling fees. Our findings contribute to the increasing evidence that the design of CCTs, in this case transfer size, matters considerably in terms of achieving program goals.