The timing of the unconditional cash transfers and human capital accumulation: experimental evidence from Malawi

Abstract

Unconditional Cash Transfers (UCTs) are effective policy instruments to increase schooling outcomes, but are UCTs effective in the long term? This paper provides the first evidence on the long-term schooling impacts of a national cash transfer program in Africa. Specifically, we follow a panel of school-aged children in the Malawi Social Cash Transfer Program (SCTP) in three waves (2013-baseline, 2015-endline, and 2021-follow-up) and compare their schooling outcomes between children randomized to receive transfers early and those randomized to receive the transfers later. In the short-term, we find that school enrollment and highest-grade completion are significantly higher for children in the early treatment group, and these impacts are highest for children who were not in school at baseline, and for older children, these impacts are enhanced the closer the distance to a secondary school. In the long term, five years after the late treatment group started receiving transfers, these impacts disappeared. The results are consistent with the school environment for this population in Malawi, where very few children manage to complete primary school and transition to secondary school. The policy implication is that UCTs alone cannot raise grade attainment without complementary investments in school quality.