CGD Notes

Making it Pay to Stay in School

8/3/05
Based on the work of Samuel Morley and David Coady
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From Social Assistance to Social Development: Targeted Education Subsidies in Developing Countries describes a promising and novel approach: offering low-income mothers cash and other incentives to keep their kids in school. This recent, compelling volume of case studies and analysis by Samuel Morley and David Coady shows how programs in countries as different as Brazil and Bangladesh have boosted school attendance and at the same time raised living standards of poor households.

Morley and Coady call these incentive programs "conditioned transfers for education'' or CTE. The approach is based on the simple fact that poorparents often cannot afford to wait for future income from educated children. They and their children need more income now, even if it means keeping the kids out of school. By giving food or money to low-income parents who keep their kids in school, such programs meet two goals: they raise the incomes of the poorest families and they provide education to the next generation of parents, helping to break the cycle of poverty.