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CCTs have been growing in popularity throughout the developing world and especially in Latin America--particularly Mexico and Brazil. The idea behind these schemes is to develop long-term human capacity in the form of increased nutritional, health, and educational outcomes, and to break the inter-generational cycle of poverty that afflicts implementing countries.
The "Conditional" in the CCT theoretically has a number of benefits, both for donors and recipients. For donors, many have remarked that conditionalities make cash transfers (from governments to citizens) more palatable to politicians. On the other hand, conditionalities provide a mechanism by which recipients are incentivized to do things like send their kids to school (rather than work or beg) and get medical checkups and immunization for women and young children. Some programs have additional benefits such as providing female heads of household with increased independence or providing a source of income security that allows families to access credit or purchase durable goods (Abhifit Banerjee and Esther Duflo's book Poor Economics has a great section on the difficulties poor people face in accessing credit and the benefits of income security for development).
The World Bank study isolates one particular theoretical benefit of CCTs, and asks to what extent conditional versus unconditional cash transfers really increase school attendance. The results were interesting; CCTs and UCTs (unconditional...) had similar positive impacts on enrollment for "children who are traditionally favored by parents for school participation, including boys, older children, and higher ability children." These are children that parents may "prioritize" with regards to obtaining education; parents already want to send them to school. So, cash transfers--with or without conditionalities attached--help relieve the burden (or opportunity costs) of sending these kids to school.
Where the conditional transfers excelled however, was in improving enrollment of what the authors called "marginal children"--kids who are less likely than the first group to go to school, or who go to school less often. These include girls, younger children, and children with lower abilities. For these children, cash benefits led to a statistically significant increase in enrollment of over 20 percent for girls, 37 percent for younger children, and 36 percent for low ability children, compared to the average enrollment for these groups. UCTs, on the other hand, saw either a statistically insignificant increase in enrollment, or a much smaller enrollment for these groups.
In other words, CCTs seem to excel in encouraging school attendance among the most marginalized groups of marginalized populations, and provide a pretty good bang for the buck.
Keep in mind, these results obtain in Burkina Faso, a relatively small rural country in the West African Sahel. I would be interested to see a comparative look at CCTs in more urbanized countries, or geographically larger countries, for example. In addition, this study defines educational outcomes mostly in terms of enrollment and attendance; education observers in this country well know that educational outcomes rest on a variety of other factors, not the least of which include the quality of the schools and teachers or the availability of textbooks and classroom technology, for example. These elements generally lie within the supply side of the educational attainment equation, however, and it is becoming ever more apparent that CCTs at least have a strong and positive impact on the demand side of things.
