The Effects of The Cash Transfer Programme for Poor Students on Child’s Work Participation: Evidence from Java (Indonesia)
Cash transfer is considered as a relatively safe policy instrument to improve child welfare. Over the past ten years, Indonesia has made major progress in reducing the number of children involved in child work. It has done so primarily by expanding education provision to increase the time children spend in school and reduce the time children allocate to work. This progress has been supported by the implementation of poverty alleviation programmes that provided income assistance to vulnerable families. The results of this thesis are particularly relevant for understanding the role of cash transfer programmes in developing countries. The findings of this thesis suggest that the Government of Indonesia needs to reach the poorest children who are out of school. This thesis aims to analyse whether cash transfer subsidies provided by the Government of Indonesia were sufficient for children to decrease the probability of working and reduce the hours of working activities of children within households. This thesis includes a detailed exploration of differences in impacts by children’s gender and areas of residence. The cash transfer for poor students programme is the third-largest antipoverty intervention that targets poor households, and it is designed to reduce poverty and enable families to invest in human capital development in children particularly. The programme was carried out in Indonesia from 2008 and has been in action until today. This thesis uses cross sectional data to analyse the effects of the programme on child’s work. The data covers children aged from six to 14 from the Indonesian Family Life Survey (IFLS) in 2014. The data is non-experimental and programme participation is not randomly assigned. The bivariate Probit with endogenous dummy models are also estimated for the probability that a child is working, controlling for additional characteristics of the child, head of household, household and community-level characteristics. To check the robustness of our results, we provide evidence based on two different identification strategies: a separate analysis based on child’s gender and residence using working participation of children within households, and a regression analysis based on hours worked. This thesis has found that the cash transfer programme has a negative and significant impact on child’s work activities within households. The result indicates that the programme did affect a child’s work participation whether children are considered as one group or are disaggregated by sex, by residence or by number of hours worked. We found that the programme has a positive impact on reducing the probability of participation in household chores, economic activities and any activity. Children who attended school and participated in the programme, in comparison with those children who did not join the programme, have experienced a 32 – 38 percentage points decrease in working participation inside and outside the home. However, within the subsample of boys and girls, the programme caused substantial reduction in economic activities for boys. Meanwhile, girls who participated in the programme received a negative impact on the probability of engaging only in household chores. The estimate also shows that there is a smaller impact on children from beneficiary households in urban areas in activities inside and outside the home than on rural children. Furthermore, it has also been found that the programme was able to reduce time spent by children in the programme in different working activities.
Advisor: Ozanne, Arlene
Degree Name: Master of Science
Degree Discipline: Economics
Publisher: University of Otago
Keywords: Cash Transfer; Bivariate Probit; IFLS; Child Work
Research Type: Thesis