Cash transfers, behavioral changes, and the cognitive development of young children : evidence from a randomized experiment

Abstract

This paper analyzes the impact of a randomized cash transfer program on cognitive development in early childhood in rural Nicaragua. The authors first show that a very large sample of children in their sample are delayed along various dimensions, including language, memory, and social skills, and that these delays are related to household per capita expenditure levels. The authors then show that the program had significant effects on cognitive outcomes, especially language. Program impacts are larger for older pre-school aged children, who were also more likely to be delayed. The authors analyze how the program affected several inputs into early childhood development that have been identified as key risk factors in the literature. Households randomly assigned to receive transfers increased the consumption of nutritious foods and provided more cognitive stimulation to children than those assigned to the control group. Moreover, the authors show that these impacts are not due to the cash component of the program only. The expenditure patterns of beneficiary households are significantly different from those of control households, indicating that households do not spend the cash received through the program in the same way as other income. The rest of the paper proceeds as follows. In section two, the authors describe the Atencion a Crisis pilot program, their identification strategy, and the data, in particular the measures of cognitive development. Section three describes the frequency of early childhood development delays in their sample. The authors present the main results in the paper, including a disaggregation of program effects by age and gender, in section four. In section five the authors discuss changes in intermediate inputs, and whether these can be explained entirely by the increase in overall expenditures due to the transfer. Section sixth concludes.

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