Three Essays on Intended and not Intended Impacts of Conditional Cash Transfers

Abstract

Targeted to the poorest households, Conditional Cash Transfers (CCTs) may constitute up to 30 percent of the households' monthly consumption. An unexpected increase in income of such magnitude is likely to affect behavior of the beneficiaries beyond the changes envisioned by the creators of the program and imposed by the conditions. My dissertation focuses on such unintended impacts of the CCT programs. I explore the impact of Juntos, a CCT program in Peru, on political participation and intra-household allocations as well as estimate its effects on the targeted outcomes, such as education and utilization of medical services. Using two alternative econometric techniques - difference-in-difference and panel data estimation and individual as well as district level data sets, I demonstrate in my first essay that the program increased turnout in presidential and regional elections in the incorporated districts. In the second essay I address the relationship between domestic violence and increases in the income of a victim, generated by the transfer. I develop a model, which incorporates two aspects of this relationship: increases in victim's income may exacerbate a rent-seeking motif behind domestic violence, and at the same time they may render her greater bargaining power. I empirically test the predictions of the model using difference-in-difference framework and matching techniques. I find that arrival of the program decreased the prevalence of domestic violence, and the decreases are higher among women whose outside of marriage utility is more affected by the transfer than their within marriage utility: women with less children and with cash-paying jobs. In my third essay I carry out an impact evaluation of the targeted outcomes of the program: consumption, education and health. Using matching and instrumental variables methods, I find significant improvements in all three areas.

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