Schooling and Labor Market Impacts of Bolivia's Bono Juancito Pinto Program

Abstract

OVER THE PAST 15 YEARS, cash transfer programs have become a core component of antipoverty policy strategies in the developing world.In Latin America in particular, cash transfer programs have adopted a multidimensional approach to poverty, whereby income support is provided together with simultaneous interventions in health, education, and nutrition.This "human development" approach to poverty reduction places a strong emphasis on tackling the intergenerational transmission of poverty through human capital investment (Levy and Schady 2013; Niño-Zarazúa 2011; Levy 2006).Mexico's Progresa-Oportunidades-Prospera, Brazil's Bolsa Familia, Colombia's Familias en Acción, and Chile Solidario are prominent examples of this antipoverty policy framework.The incentive mechanisms that cash transfers generate for schooling decisions are instrumental in enhancing human capital formation and tackling the structural roots of poverty (Parker, Rubalcava, and Teruel 2007).Monetary incentives are particularly important, as they link income support with mandatory regular school attendance.This is done through explicit conditions that are monitored and enforced with varying degrees of effort and efficacy across countries.1 Since cash transfers target the poor, monetary incentives can have both an income effect (contingent on the size of transfers, relative to household income) and a substitution effect, which materializes through a reduction in the shadow prices of education and which in turn can affect decisions on both schooling and child labor (Behrman, Parker, and Todd 2009;Bourguignon, Ferreira, and Leite 2003).The empirical literature on the impacts of cash transfer programs on schooling and child labor has shown that overall, cash transfers can successfully raise school enrollment and attendance (Attanasio et al. 2010;Dammert 2009;Schady and Araujo 2006;Skoufias et al. 2001); under certain conditions, they can also delay or reduce child labor, both the likelihood of children working and the intensity of work for those who do work (Behrman et al.

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