Posted on 21 July 2011
Congratulations to Ranjeeta Thomas who won the prize for the best student paper at the World Congress of the International Health Economics Association (iHEA) in Toronto. Her paper " Conditional Cash Transfers to Improve Education and Health: An ex ante evaluation of Red de Proteccion Social, Nicaragua." is available as a HEDG working paper.
Abstract: The paper uses baseline data from a randomized experiment to estimate ex ante the impact of Nicaragua's conditional cash transfer program Red de Protección Social. It uses a behavioural model with a health production framework and relies on reduced form estimation of the impact by matching untreated individuals on functions of observable characteristics. Identification of the impact relies on variation at the baseline in the variables related to the policy being evaluated, in this case school costs and full wealth. A household model of school enrolment and investment in child health is used to derive the reduced forms that are empirically estimated. The approach is used to estimate the impact of the cash transfer on accessing preventive care for children i.e taking children below 3 years to health checks and full coverage of vaccinations for children between 12-23 months. Empirically the model is implemented using a semi-parametric single index framework that allows for an increase in the dimensionality of the covariate vector. The outcomes are binary and the semi-parametric estimator proposed by Klein and Spady is used to predict the unobserved outcomes under treatment. The baseline data is used as a single cross-section combining both control and treatment groups. The estimated ex ante impact is validated against results from the randomized experiment. These models are then used to simulate two policy scenarios that differ from the original program in the amount of the transfer and the conditionality. These simulations are carried out for both school enrolment (children aged 7-13 years) and preventive health care utilization for younger children.
In general the estimated impacts all have the same direction as the experiment. The model performs well in predicting the magnitude of the impact for the two health related outcomes. An improvement in household income increases a households' investment in child health. The two policy simulations show interesting results. The first simulation maintains the school related conditionality of the program but reduces both cash transfer components by 25%. The estimations show little difference in most of the categories from the original program. The price effect from reducing school costs by conditioning enrolment can be achieved with a lower level of transfer as can similar levels of preventive care utilization. The second simulation of a cash transfer equal to the amount of just the food security component without the school related conditionality shows a strong income effect for immunizations and is accompanied by change in enrolment patterns, with higher enrolment levels for older children but at the cost of delays in enrolling younger children.
This complements previous prizes for York PhD students Teresa Bago d'Uva (Barcelona 2005) and Pedro Rosa Dias (Beijing 2009) and for Stephanie von Hinke Kessler Scholder (Copenhagen 2007) who will join the Department of Economics and Related Studies as a lecturer in October.