The Schooling Decision: Family Preferences, Intergenerational Conflict, and Moral Hazard in the BrazilianFavelas

• Published in: The Journal of political economy Vol. 120; no. 3; pp. 359 - 397
• Main Authors: Bursztyn, Leonardo, Coffman, Lucas C.
• Format: Journal Article
• Language: English
• Published: University of Chicago Press 01-06-2012
• Subjects: Adults; Cash transfers; Cell phones; Children; Conditional cash transfer programs; Household income; Parents; School age children; School attendance; Text messages
• ISSN: 0022-3808; 1537-534X
• DOI: 10.1086/666746

This paper experimentally analyzes the schooling decisions of poor households in urban Brazil. We elicit parents’ choices between monthly government transfers conditional on their adolescent child attending school and guaranteed, unconditional transfers of varying sizes. In the baseline treatment, an overwhelming majority of parents prefer conditional transfers to larger unconditional transfers. However, few parents prefer conditional payments if they are offered text message notifications whenever their child misses school. These findings suggest important intergenerational conflicts in these schooling decisions, a lack of parental control and observability of school attendance, and an additional rationale for conditional cash transfer programs—the monitoring they provide.