1. Karen Macours (Paris School of Economics)
Cash Transfers, Behavioral Changes, and the Cognitive Development of Young Children: Evidence from a Randomized Experiment
Karen Macours (Paris School of Economics)
Norbert Schady (IADB)
Renos Vakis (WB)

2. Introduction
Food security and nutrition, in particular for young children, often motivated for it’s importance on cognitive development during early childhood
Yet, often early childhood cognitive development outcomes are not measured per se
Leads to extrapolation of nutrition (anthropometric) results to cognitive development
E.g. debate on critical ages (first 2-3 years of life) for childhood nutrition interventions
But we can obtain observable measures of ECD that are standardized (like anthro)

3. Motivation
Cognitive development in early childhood is an important predictor of success throughout life
Literature on how nutritional supplements and early childhood stimulation programs affect early childhood development
Much less is known about programs that affect investments of parents directly

4. Motivation Conditional cash transfer programs:
Are extremely popular in the developing world (29 countries and counting), especially in Latin America
Have been evaluated extensively to assess impacts on school enrollment and attendance, as well as on health service utilization, and nutritional and health status
But little evidence available on the impact of cash transfer programs on cognitive and emotional development in early childhood
Yet there is an open debate on longer-term returns to human capital acquired through CCTs (achievement, income, ….)
We analyzed the impact of the Atención a Crisis program, a conditional cash transfer (CCT) program, on cognitive development outcomes in early childhood in Nicaragua

5. Outline Intervention Context, data, outcomes Results on ECD outcomes
Persistence of effects
Transmission mechanisms
3 risk factors for child development
Is transfer income used like other sources of income?

6. Intervention Atención a Crisis program
Cash payments to mothers: ~18 percent of pce for median household
Social marketing of program: intended to benefit children, encourage dietary diversity
Facilitates social interactions on human capital investments
Conditions:
Schooling
Health check-ups for preschool-aged children, but not monitored
Objectives:
Short-run safety net after a drought shock
Facilitate long-term risk management through income diversification
Three treatment packages:
CCT
CCT + vocational training program
CCT + productive investment grant

7. Context, data, outcomes Where?
6 municipalities in rural Nicaragua with high levels of extreme poverty and frequent droughts
Who: Households in sample are very poor
Average years of schooling:
Fathers: 3.5 years
Mothers: 4 years
27 percent of children stunted
82 percent live on less than 1 US $ per capita per day

8. Context, data, outcomes Experimental design
Random assignment of 56 communities to “treatment”, 50 “control”
Baseline survey: April-May 2005
Proxy means test: households above threshold ineligible (<10 percent of households)
3,000 eligible households in treated communities, 1,000 potentially eligible households in control communities
No evidence of significant differences between treated and control households at baseline
Households started receiving payments in November 2005: Average household received payments for 9 months
Follow-up survey: July-August 2006
Program ended in December 2008
Second follow-up Survey in 2008/09

9. Context, data, outcomes Attrition Compliance with experimental design
Very low levels of attrition: 1.3 percent of households were not re-interviewed in 2006, about 3% in 2008/09
Uncorrelated with treatment
Very similar characteristics of full sample of households and households re-interviewed
Compliance with experimental design
Very high levels of compliance with experimental assignment
95 percent of households assigned to treatment group received transfers
Only 1 household in control communities received transfers
Of treated households, more than 95 percent received the full amount of the transfer for which they were eligible

10. Context, data, outcomes
Denver Developmental Screening Test: Four subscales
(a) Social-personal: social interactions, ability of child to dress and eat on her own, imitate others
(b) Language: use of sounds, words, sentences
(c) Fine motor skills: manual tasks such as drawing, playing with cubes, reaching for objects
(d) Gross motor skills: crawling, walking, jumping, throwing
Test scaled based on number of tasks for which child is in the bottom quartile of the reference population distribution (or alternatively in the bottom decile)
Applied to children 0-83 months of age

11. Context, data, outcomes
Additional tests applied to children months of age
TVIP: Test of receptive language
3. Memory for names: Visual memory from Woodcock-Munoz battery
4. McCarthy:
Short-term memory: repeating strings of numbers
Leg-motor skills: walking on tiptoes, standing on one foot
5. BPI: Behavioral Problem Index
Incidence of behavioral problems
All were piloted in our population, and minor adjustments were made, as needed

12. Choice of instruments
All outcomes (except BPI) can be age-standardized using “reference populations” (like anthropometrics z-scores)
All have been used extensively in the literature, including in developing countries
Standardized Spanish-language version of test existed (for tests involving language, i.e. Denver, TVIP, and the memory for names)
Ease of standardized administration of test
by non-experts,
in (often difficult) field conditions,
with children who are not familiar with (fancy) toys
Applicability of tests in population with potential large average delays
Duration of tests (~ limited attention spans)

13. Pre-testing process Wider set of tests tried in pre-testing
Appropriateness of tasks and test items
Minimize scoring mistakes
Timing
Variation in population
Power to distinguish sufficiently between observations in the left tail
Establishing of trust with extremely shy children
Creation of optimal test environment, given field circumstances
And in particular: prevent interference and observation by other household members (~ minimize risk to human subjects)

14. Table 2: Frequency of delays in control communities relative to international norm

15. Context, data, outcomes In summary:
Children in our sample have very large delays in a variety of domains:
Especially large in language and in their social-personal skills
Much smaller for motor skills
Delays tend to increase with child age
Socioeconomic gradients in cognitive outcomes—even within our sample of very poor children
Gradients steepest for language, absent for the BPI
=> There may be potential for cash transfers to improve outcomes

16. Main results 1. Significant program effects on cognitive skills
Program effects concentrated on outcomes with largest delays, steepest gradients
Effects persist 2 years after the program ended
4. No evidence of significant heterogeneity by gender
5. Evidence of significant heterogeneity by child age
Program effects on language concentrated among older children, ages 5-6

17. Main results: Robustness
5. Findings robust to a very large set of alternative specifications
With and without controls
Only children in household of main beneficiary
Only children of main beneficiary
Not removing age effects
Not standardizing
Not dropping 1 percent outliers
Using narrower age range for Denver (upto 6)
Not including children upto 10 months of age (in utero exposure)
Using tasks in bottom decile (instead of bottom quartile) for Denver
Using only observed (not reported) outcomes for Denver

18. Transmission mechanisms
(1) Focus on three risk factors for child development
Inadequate nutrition
Inadequate stimulation
Health status—including lack of micronutrients, exposure to infectious disease, caregivers’ mental health

20. Transmission mechanisms
(1) Focus on three risk factors for child development
Changes tend to be larger for older kids—often significantly so (for example, for child food intake, whether a child is read to, whether they have been taken to a growth check-up, have received micronutrients, or de-worming medication)
Pattern consistent with the observed improvements in final outcomes

21. Transmission mechanisms
(2) Is transfer income used like other sources of income?
Maybe…
Money is fungible
Maybe not…
Women received transfer
Women are thought to spend a higher fraction of the resources they control on children than men (for example, Lundberg et al. 1997)
Social marketing of program
Kooreman 2000 on child support income in Holland
Fraker et al on food stamp “cashouts” in the US
Estimate changes in intermediate inputs among treated households in three critical “risk factors” identified in the literature
Food
Stimulation
Use of preventive health care

22. Transmission mechanisms: Food Engel curves at follow-up

23. Transmission mechanisms: Food Engel curves

24. Transmission mechanisms: Composition of food expenditures

25. Transmission mechanisms: Stimulation

26. Transmission mechanisms: Preventive health care

27. Transmission mechanisms: Conclusions
Upwards shift in the Food Engel curve
Changes in the composition of food expenditures
Decrease in food share devoted to staples
Increases in food share devoted to animal proteins, and fruits & vegetables
Similar results for child food intake
Increase in stimulation:
Increase in proportion of children at a given expenditure level who have access to books, pen & paper
Significant increase in number of hours read to
Improvements in some measures of child health
Program effects on these “risk factors” tend to be larger among older children
Behavioral changes: At any level of expenditures, treated and control communities spend resources differently

28. Conclusions
Cash transfers have modest but significant effects on some dimensions of child development after only 9 months
Impacts persist 2 years after the program ended
Evidence of program effects on risk factors for child development
Nutrition
Stimulation
Child health
Transfer income appears to have been used differently from other sources of income: suggests there were behavioral changes

29. Implications
Large delays and the potential for catch-up indicate need for policy attention
Interventions that facilitate investments made by parents to reduce risk factors can result in ECD gains
Account for gains in ECD when considering gains from food security programs
This might put focus on other aspects of food security (~ quality of the diet)

30. Next steps Next round of panel collected in 08-09
Different treatment groups have different income levels (though differences are small)
=> Further disentangle income effect from behavioral changes
Complementary ECD intervention focused on parental care
Role of information for changes in investment behavior in early childhood
Allocated randomly on Atencion a Crisis treatment and control
Role of mothers versus fathers
Related work
Medium/Long-term evaluation of the original CCT program in Nicaragua, taking advantage of randomized phase in
Do kids that benefitted in first 2 years of life have better cognitive and schooling outcomes 10 years later ?

31. Thank you !