Association for Public Policy Analysis & Management

The World Bank has been advocating cash transfers in many African countries especially cash transfers that create the incentive for behavioral changes such as attending school. A cash transfer is typically a fixed or variable sum of money provided by a governing body to households that fall below certain income thresholds either unconditionally or conditional on a specific change in behavior (e.g. school attendance, health care utilization etc).

The Nigerian Government began providing unconditional transfers to “poor and vulnerable” families in 2017. The program would also provide additional conditional transfers to eligible families that enrolled schooling age children in school. The government (supported by the World Bank) decided against conditional transfers due to the difficulties in monitoring school attendance within the country. This belies the question: How do the enrollment effects of a unconditional cash transfers compare to those from a conditional program in a country like Nigeria? Within the development literature, families with relatively higher incomes are more likely to send their children to school. Ceteris paribus, increasing household earnings is expected to reduce child labor and increase school enrollment.

The ex-ante methodology proposed by Bourguignon et al. (2003) is extended to compare the likely educational enrollment effects of both programs. The National Cash Transfer program in Nigeria intended to provide transfers to poor families that enroll their children between the ages of 7 and 15 to school. The program is implemented at the state level. We compare the likely enrollment effects of this program to a program that provides the same amount to all income-eligible families unconditionally. We simulate these effects using three waves of Nigeria’s General Household Survey Panels. The microsimulation approach allows us to test alternate program design by varying transfer amounts, age eligibility, program duration etc. In addition, the study takes into account the inter-temporal labor-leisure decision making process within the household. From our literature searches, this would be the first time a panel dataset would be used to address this question in the development literature.

This study is in part motivated by the UN Sustainable Development Goals for 2030 as well as Africa’s Sustainability Agenda for 2063 aimed at eradicating extreme poverty and providing universal basic education in developing countries.