Abstract

This paper evaluates the existence of spillover effects of the “Más Familias en Acción” program on eligible children who are not beneficiaries of the subsidy while their siblings are. Using a nonexperimental design, through a propensity score matching and a difference-in-differences model, we found a negative effect on the school enrollment of nonbeneficiary siblings, as well as an increase in their absenteeism. Furthermore, we found heterogeneous spillover effects on child labor by gender and age. Based on the results, we recommend redesigning the conditional cash transfer program by expanding the coverage to a household level, instead of limiting the number of beneficiary children per household.

Introduction

During the last quarter of 2018, 1.1 million Colombian children aged 5–۱۷ worked an hour or more per week in some economic activity and performed domestic chores for 15 h or more weekly. That is, 10.3% of children worked during their childhood or adolescence (DANE, 2019).

In Colombia and most countries in the world, child labor is considered undesirable since it can harm children’s development, training, and performance in other activities that contribute to their well-being and future achievements (ICBF, 2017). Furthermore, child labor is a social problem because it compromises the education level reached by children, limiting human capital accumulation and economic growth (Holgado et al., 2014; Psacharopoulos, 1997; Khanam, 2007; Akabayashi and Psacharopoulos, 1999).

From a public policy perspective, the first step in eliminating or reducing child labor is to understand the reason adult household members allow their children to work. According to the Great Integrated Household Survey (GEIH by its Spanish initials), 85% of young Colombians work because of economic incentives (to participate in the family’s economic activity, to have their own money, or to help with household or education expenses). Consequently, governments should design public policies that not only search to discourage child labor but alleviate poverty and reduce economic stress in households as well.

Results

We test the impact of the program on four outcomes: (i) schooling attendance, a dummy equals 1 if the child attends an educational center, 0 otherwise; (ii) absenteeism days, the number of days that the child missed classes; (iii) child labor supply, a dummy equals 1 if the child worked during the week before the application of the survey