Education for the alleviation of poverty : a comparative study of conditional cash transfer programs to improve educational outcomes in Nicaragua and Colombia

The importance of education for individual well-being, social cohesion and economic growth is widely accepted by researchers and policymakers alike. Yet there exist vast numbers of people around the world, largely poor, who continue to lag behind wealthier people, often within their own nations. Conditional cash transfer programs were created to encourage investments in education and health by subsidizing their cost and changing household preferences. The programs increase short-term income as well as future wage potential, thus decreasing short-term and long-term poverty, as well as the poverty that is passed from generation to generation. Begun in Mexico and Brazil, the conditional cash transfer model is being replicated in many countries, but its replicability across socioeconomic and political contexts is far from clear. The present study adds to the research on conditional cash transfer programs through a comparative quantitative analysis of the effects of two programs on key educational outcomes in Nicaragua and Colombia. Using secondary panel data for the Nicaraguan Red de Proteccion Social and the Colombian Familias en Accion programs, a model reflecting demand constraints to education is used to determine the relative impacts of individual and household characteristics in the schooling decision, as well as to measure program impact in some of the most impoverished communities in the two countries. The empirical analysis is situated within a description of the historical, political and demographic contexts into which the programs were introduced. The results indicate that both programs increased enrollment and attendance, with lesser but still positive effects on retention. These effects were stronger for boys in Colombia, as was the importance of schooling expectations in determining enrollment. The study suggests that conditional cash transfer programs should be effective in other settings in which low educational attainment is caused largely by a lack of household resources.