Direct and Spillover Effects of a Child-Targeted Unconditional Cash Transfer on Education and Health Outcomes in South Africa

Iris G. Boutros, Harvard University

Conditional cash transfer programs are having significant effects on human capital investments in poor households. Would poor households in poorer countries make these investments even if the cash transfer was unconditional? Although nontrivial program resources are spent on verifying that participants meet conditions, the marginal benefit of conditions remains unclear. We know little of how much is attributable to the cash transfer and how much is attributable to the accompanying conditions. In this paper, I evaluate the effect of an unconditional cash transfer program, targeted to children and free of required behaviors, on household investments in children. South Africa’s Child Support Grant (CSG) is a relatively new initiative to alleviate child poverty with limited evaluations due to program rules and data availability. In one of the first impact evaluations, I find the CSG to have a significant positive effect among black Africans living in low-income communities.