Medium- and Long-Term Educational Consequences of Alternative Conditional Cash Transfer Designs: Experimental Evidence from Colombia

Abstract

In 2005 the city of Bogota, Colombia, introduced three conditional cash transfer programs for secondary schooling, randomly assigning socioeconomically disadvantaged students to different payment structures. We show, through administrative data, that forcing families to save one-third of the transfer increases long-term human capital accumulation by means of additional tertiary education—which is not incentivized—, casting doubt on conditionalities as a driving mechanism. Directly incentivizing on-time tertiary enrollment does no better than forcing families to save a portion of the transfer. Whereas forcing families to save increases enrollment in four-year universities, incentivizing tertiary enrollment only increases enrollment in low-quality colleges.