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How do educational transfers affect child labor supply and expenditures? Evidence from Indonesia of impact and flypaper effects (De Silva & Sumarto 2015)

Absence of conflict of interest.

Citation

De Silva, I., & Sumarto, S. (2015). How do educational transfers affect child labor supply and expenditures? Evidence from Indonesia of impact and flypaper effects. Oxford Development Studies, 43(4), 483-507. https://doi.org/10.1080/13600818.2015.1032232

Highlights

  • The objective of this study was to assess the impact of the Cash Transfer for the Poor Students Programme/Bantuan Siswa Miskin (BSM) program on child labor.
  • The study used a nonexperimental design to assess the program’s impact. With data collected from a national survey, the authors compared the proportion of children that participated in work between those who received financial educational support in the past year before taking the survey, and matched comparison groups of children who had not received financial educational study.
  • The study found that receipt of educational assistance was significantly associated with lower rates of child labor.
  • The quality of causal evidence presented in this report is low because the authors did not ensure that the groups being compared were similar before the intervention. This means we are not confident that the estimated effects are attributable to BSM; other factors are likely to have contributed.

Intervention Examined

Cash Transfer for the Poor Students Programme/Bantuan Siswa Miskin (BSM)

Features of the Intervention

The program, Cash Transfer for the Poor Students Programme or Bantuan Siswa Miskin (BSM), began in 2008 to provide households with financial support for children’s education. It was implemented in Indonesia by the local government, and aimed to improve educational participation and attainment in low-income students from elementary to university level by encouraging household investment in educational expenses and reducing child participation in work. Households received cash transfer funds at the beginning of each school year to cover school-related costs. The selection of participants was limited by the amount of available funds, and was determined by school administrators. However, there was not clear or consistent criteria for selecting households into the program.

Features of the Study

The study was a nonexperimental design where the authors used propensity score matching to create comparison groups that did not receive any cash transfers or scholarships for schooling. The study included children 6-18 years old, however, the child labor outcome analyses only included those aged 10-14. Demographic and child work outcomes were measured with the 2009 iteration of the nationally representative household survey, called the Indonesia Social and Economic Survey (Susenas). The Susenas survey collected data on different topics including child labor and demographics. There was a survey question that asked whether children had received educational support in the past year; if they received educational support then the authors placed them into the treatment group, and if they did not they were placed into the initial comparison group. The authors then used the initial comparison group to create a matched comparison group that was similar in demographics to the treatment group. The propensity score matching and impact analyses were conducted separately for each of five wealth quintiles (from the lowest to the highest). Using six comparison groups formed through propensity score algorithms, the authors assessed the difference in the rate of participation in work activities between the treatment and comparison groups, controlling for demographic differences, such as child age and gender.

Findings

Employment/Child labor

  • The study found that receipt of educational assistance was significantly associated with lower rates of child labor for two of the five wealth quintiles (the lowest fifth of wealth and the second lower fifth of wealth). For the higher three wealth quintiles, there was no significant relationship between receipt of educational assistance and rates of child labor.

Considerations for Interpreting the Findings

The authors did not account for preexisting differences between the groups before program participation, such as initial participation in child labor. The preexisting differences between the groups—and not the program— could explain the observed differences in outcomes.

Causal Evidence Rating

The quality of causal evidence presented in this report is low because the authors did not ensure that the groups being compared were similar before the intervention. This means we are not confident that the estimated effects are attributable to the Cash Transfer for the Poor Students Programme/Bantuan Siswa Miskin (BSM); other factors are likely to have contributed.

Reviewed by CLEAR

December 2018

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