# **1. Introduction**

Recent evidence on the lack of a long-term impact of conditional cash transfer (CCT) programs represents an invitation to researchers to reopen the door on our understanding of the functioning of these schemes and the cases in which they may (or may not) operate most effectively. The objective of CCTs is usually twofold: immediate poverty alleviation through cash benefits and long-term poverty reduction through human capital formation. Programs such as _Prospera_ (formerly _Oportunidades_ ) in Mexico, _Bolsa Família_ in Brazil, and _Familias en Acción_ in Colombia transfer cash to households conditional on the fulfillment of certain requirements by the child and parents, notably, school enrollment and periodic health and nutrition checkups. An extensive body of literature evaluating CCT interventions has found significant positive effects of participation on household use of educational and health services, while concurrently reducing poverty and child labor.<sup>1</sup> CCTs are found to have reduced current consumption or income poverty significantly, though the evidence linking final outcomes in health and education (beyond increased enrollment and health visits), such as cognitive development and child height, is more split (Fiszbein and Schady 2009).

Notwithstanding this evidence, recent studies are beginning to cast doubt on how significant the benefits of CCTs are over the long term. Araujo, Bosch, and Schady (2016) look at the 10-year effects of Ecuador’s _Bono de Desarrollo Humano_ Program. Their findings suggest a modest increase in the probability that young women graduated from secondary school (2–3 percentage points); yet, they do not find evidence that the program’s cash transfers had an impact on attending tertiary education institutions or on the probability of working. In Cambodia, Filmer and Schady (2014) evaluate the medium-term impact of a scholarship program three years after it had ended. While they find an impact on completion rates (0.6 more years of schooling), they find no evidence of an effect of the program on test achievement, earnings, or employment or on the probability of teenage pregnancy or marriage. Evidence from Mexico is more mixed. Behrman et al. (2009) compare the effects of differential exposure to _Oportunidades_ on rural teenagers receiving transfers for 5.5 years relative to teenagers receiving them for 4.0 years. While the study finds 0.2 additional years of schooling among students in the treatment group (those with 1.5 years longer exposure); there is no evidence of an effect on achievement tests. The program is found to have a negative effect on labor market participation among boys.<sup>2</sup> Results also show a decline in migration rates among boys (6 percent less likely to migrate than the control group). Additional research on the subject based on nonexperimental evidence in Behrman, Parker and Todd

> 1 See, for example, Attanasio et al. (2005); Behrman, Sengupta, and Todd (2005); Bourguignon, Ferreira, and Leite (2003); Cardoso and Souza (2003); De Janvry and Sadoulet (2006); Glewwe and Olinto (2004); León and Younger (2007); Maluccio and Flores (2005); Schady and Araujo (2008); Schultz (2004); Todd and Wolpin (2006).

> 2 As discussed in the study, the effect of the program is ambiguous for the stage of the life cycle considered. The effect of schooling that substitutes for work appears to dominate the opposite effect, that is, once school is finished, the increase in human capital should lead to higher employment and wages.

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