DO Education-Targeted Cash Transfers in the Global Contex Promote Economic and Social Development?

Purpose: The first of the UN Millennium Development Goals (MDG's) is the reduction of global poverty by half by 2015 (Kanbur, 2005). There are linkages between education and economic and social development (Figlio, 2007-2008; Sherraden et al., 2007). Education-Targeted Transfer Policy (ETCT) aims to provide both the means to obtain an education for children in poverty with an economic incentive for compliance with school attendance. Based on Keynesian economic theory and Bourdieusian capital theory, it is expected that countries that have implemented ETCT policy show consistent upward trends in economic, social, and education indicators. Keynes (1936) posited governmental interventions are necessary to control for the failures of the market. Bourdieusian capital theory posits that initial capital is necessary for the formation of human and cultural capital (Bourdieu, 1986). By providing financial resources to support children's education, ETCT policies are planned to directly promote education and to indirectly lead to national economic development. (Bils & Klenow, 2000; Coulombe, Tremblay, & Marchand, 2004). However, up to now, there is very little research on evaluating the impact of ETCT policy on the country's development (Fiszbein et al., 2009).

Method: An interrupted time series analysis is conducted on 19 countries before and after ETCT policy implementation on the outcome variables of economic development as indicated by GDP per Capita, social development variables of Gini Index, HDI, CDI, EPI/ESI, and utilization of education variables of enrollment and completion rates in primary, secondary, and tertiary education and literacy rates. Visual time trend analysis is conducted on plotted graphs, and statistical support is obtained with t-test and regression analysis.

Results: Results show that in six of the 19 countries education enrollment and completion rates fell after ETCT implementation, and even in countries where there was an increase in enrollment and completion rates, the linkage with development is not very clear. For example, in Bangladesh data shows that while enrollment rates in elementary school for all males and females have increased dramatically following implementation of ETCT policy, enrollment in secondary school has decreased for all groups since the all-time high in 2002 and growth in literacy rates has decelerated since 2002. Results from Mongolia show that literacy rates have decreased since implementation of ETCT policy; while economic development in Mongolia started accelerating in 2001, four years before implementation of ETCT policy. These results contradict the expectation that ETCT policy promotes development, and suggest that it is development that may motivate a country to implement ETCT policy. Regression results show that trends had begun their upward movement before implementation; t-test results were inconclusive.

Implications: ETCT is a promising idea that resolves poverty while creating cultural capital, but no evidence is found to support the promise. Of particular relevance for social work is the inclusion of Bourdieu's capital model because it takes into account the effects of social stratification. Policy that does not take into account the real barriers in people's lives may not result in the desired outcomes.