Does conditional cash transfer deliver? The Indonesian evidence on PKH
Abstract
Social protection programs aim to secure individuals’ incomes from socioeconomic shocks and provide access to social services for developing human capital and alleviating poverty. In Indonesia, the Family Hope Program (PKH – Program Keluarga Harapan) is a social protection program that focuses on human capital development that requires children’s school enrollment and mothers and toddlers’ health as the conditions of cash transfers. This study seeks to analyze the effects of the PKH program on consumption expenditure, children’s educational attainment, and prenatal visits in Indonesia. We use the 2007 and 2014 IFLS (Indonesian Family Life Survey) survey data analyzed by the difference-in-difference (DID) method. The results demonstrate that PKH has a significantly positive effect on food consumption expenditure. However, PKH has insignificantly negative effects on children’s educational attainment and prenatal visits. The results suggest that the government monitors and ensures that the targeted recipients receive the program’s benefits. As such, the government can enhance the recipients’ awareness of the program’s benefits and ensure the equal availability of supporting infrastructure that enables households to utilize education and health facilities optimally.
Keyword : Program Keluarga Harapan (family hope program), consumption expenditure, children’s education, difference-in-difference, Indonesian Family Life Survey
How to Cite
Hudang, A. K., Hariyanto, T., & Handoyo, R. D. (2024). Does conditional cash transfer deliver? The Indonesian evidence on PKH. Business: Theory and Practice, 25(2), 447–457. https://doi.org/10.3846/btp.2024.13865
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Adato, M., & Hoddinott, J. (2010). Conditional cash transfer programs: A “magic bullet” for reducing poverty? ReserchGate. https://www.researchgate.net/publication/24110261_Conditional_cash_transfer_programs_A_magic_bullet_for_reducing_poverty
AEI-Brookings. (2015). Opportunity, responsibility, and security: A consensus plan for reducing poverty and restoring the American dream. https://www.brookings.edu/articles/opportunity-responsibility-and-security-a-consensus-plan-for-reducing-poverty-and-restoring-the-american-dream/
Afkar, R., & Matz, J. (2015). Cash transfer, in-kind, or both? Assessing the food and nutrition security impacts of social protection programs in Indonesia. AgEcon.
Ajmair, M., & Akhtar, N. (2012). Household consumption in Pakistan (A case study of District Bhimber, AJK). European Journal of Scientific Research, 75(3), 448–457. https://www.econ-jobs.com/research/43049-Estimation-of-Household-Consumtion.pdf
Alam, G. M. (2009). The role of science and technology education at network age population for sustainable development of Bangladesh through Human Resource Advancement. Scientific Research and Essays, 4(11), 1260–1270.
Baird, S., Ferreira, F. H., Özler, B., & Woolcock, M. (2013). Relative effectiveness of conditional and unconditional cash transfers for schooling outcomes in developing countries. Campbell Systematic Reviews, 9(8). https://doi.org/10.4073/csr.2013.8
Barrett, C. B. (2002). Food security and food assistance programs. In Handbook of agricultural economics (Vol. 2, pp. 2103–2190). Elsevier. https://doi.org/10.1016/S1574-0072(02)10027-2
Barrientos, A. (2012). Social transfers and growth: What do we know? What do we need to find out? World Development, 40(1), 11–20. https://doi.org/10.1016/j.worlddev.2011.05.012
Barrientos, A. (2019). The role of social assistance in reducing poverty and inequality in Asia and The Pacific. https://www.adb.org/sites/default/files/publication/525401/sdwp-062-social-assistance-asia-pacific.pdf
Bradshaw, T. K. (2005). Theories of poverty and anti-poverty programs in community development. Journal of The Community Development Society, 38(1), 7–25. https://doi.org/10.1080/15575330709490182
Brady, D. (2018). Theories of the causes of poverty. Annual Review of Sociology, 45, 155–175. https://doi.org/10.1146/annurev-soc-073018-022550
Brugh, K., Angeles, G., Mvula, P., Tsoka, M., & Handa, S. J. F. P. (2018). Impacts of the Malawi social cash transfer program on household food and nutrition security. Food Policy, 76, 19–32. https://doi.org/10.1016/j.foodpol.2017.11.002
Budlender, D. (2014). Conditional cash transfers: Learning from the literature. https://socialprotection-humanrights.org/wp-content/uploads/2016/06/16020912CCTLearning-from-the-LiteratureLR.pdf
Case, K. E., Fair, R. C., & Oster, S. M. (2012). Principles of macroeconomics (10th ed.). Prentice Hall.
Central Bureau of Statistics. (2018). Statistik Pendidikan. Badan Pusat Statistik.
Central Bureau of Statistics. (2019). Statistik Indonesia. Badan Pusat Statistik.
Chakrabarty, M., & Hildenbrand, W. (2011). Engel’s law reconsidered. Journal of Mathematical Economics, 47(3), 289–299. https://doi.org/10.1016/j.jmateco.2011.01.006
Cheema, I., Farhat, M., Hunt, S., Javeed, S., Pellerano, L., & O’Leary, S. (2014). Benazir income support programme. https://www.bisp.gov.pk/SiteImage/Misc/files/BISP_EvaluationReport_Ver%20without_FINAL.pdf
De Brauw, A., & Hodinott, J. (2011). Must conditional cash transfer programs be conditioned to be effective? The impact of conditioning transfers on school enrollment in Mexico. Journal of Development Economics, 96(2), 359–370. https://doi.org/10.1016/j.jdeveco.2010.08.014
Dewan, M.-A.-M. D. (2012). Public expenditure on education and economic growth: The case of Bangladesh. ResearchGate.
Duflo, E. (2012). Women empowerment and economic development. Journal of Economic Literature, 50(4), 1051–1079. https://doi.org/10.1257/jel.50.4.1051
Evans, D. K., Holtemeyer, B., & Kosec, K. (2017). Cash transfers and health: Evidence from Tanzania. The World Bank Economic Review, 33(2), 394–412. https://doi.org/10.1093/wber/lhx001
Ferreira, F. H. G., & Robalino, D. (2010). Social protection in Latin America: Achievements and limitations (Policy Research Working Paper No. 5305). Open Knowledge Repository. https://doi.org/10.1596/1813-9450-5305
Fiszbein, A., & Schady, N. R. (2009). Conditional cash transfers: Reducing present and future poverty. World Bank Group. https://doi.org/10.1596/978-0-8213-7352-1
Gaarder, M. M., Glassman, A., & Todd, J. E. (2010). Conditional cash transfers and health: Unpacking the causal chain. Journal of Development Effectiveness, 2(1), 6–50. https://doi.org/10.1080/19439341003646188
Gertler, P. (2000). The impact of PROGRESA on health (Final Report). International Food Policy Research Institute. https://ebrary.ifpri.org/digital/collection/p15738coll2/id/125436
Gitter, S. R., & Caldes, N. (2010). Crisis, food security, and conditional cash transfers in Nicaragua. http://webapps.towson.edu/cbe/economics/workingpapers/2010-07.pdf
Glassman, A., Todd, J. E., & Gaarder, M. (2007). Performance-based incentives for health: Conditional cash transfer programs in Latin America and The Caribbean. SSRN. https://doi.org/10.2139/ssrn.1003250
Heimo, L. (2014). The idea of conditional cash transfers. Trepere University. https://trepo.tuni.fi/handle/10024/95900
Hoddinott, J., & Skoufias, E. (2004). The Impact of PROGRESA on food consumption. Economic Development and Cultural Change, 53(1). https://doi.org/10.1086/423252
Hofman, B., Rodrick-Jones, E., & Thee, K. W. (2004). Indonesia: Rapid growth, weak institutions. http://documents1.worldbank.org/curated/en/576941468774895009/pdf/307800IND0country01see0also0307591.pdf
Hyman, D. N. (2010). Public finance: A contemporary application of theory to policy (10th ed.). North Carolina State University.
Kamakura, W. A., & Mazzon, J. A. (2015). Measuring the impact of a conditional cash transfer program on consumption behavior with propensity scoring. Customer Needs and Solutions, 2(4), 302–316. https://doi.org/10.1007/s40547-015-0037-0
Khandker, S., Koolwal, G., & Samad, H. (2010). Handbook on impact evaluation: Quantitative methods and practices, the international bank for reconstruction and development. The World Bank. https://doi.org/10.1596/978-0-8213-8028-4
Lanjouw, P., Pradhan, M., Saadah, F., Sayed, H., & Sparrow, R. (2001). Poverty, education, and health in Indonesia: Who benefits from public spending? Open Knowledge Repository. https://doi.org/10.1596/1813-9450-2739
Lindert, K., Linder, A., Hobbs, J., & De la Brière, B. (2007). The nuts and bolts of Brazil’s Bolsa Família Program: Implementing conditional cash transfers in a decentralized context. https://documents1.worldbank.org/curated/en/972261468231296002/pdf/398530SP1709.pdf
Maluccio, J. A. (2010). The impact of conditional cash transfers on consumption and investment in Nicaragua. The Journal of Development Studies, 46(1), 14–38. https://doi.org/10.1080/00220380903197952
Mankiw, N. G. (2016). Macroeconomics (9th ed.). Worth.
Ninno, C. D., & Dorosh, P. (2003). Impacts of in-kind transfers on household food consumption: Evidence from targeted food programmes in Bangladesh. The Journal of Development Studies, 40(1), 48–78. https://doi.org/10.1080/00220380412331293667
Pangaribowo, E. H. (2012). The impact of ‘rice for the poor’ on household consumption. In 56th Conference. Australian Agricultural and Resource Economics Society.
Pieters, H., Vandeplas, A., Guariso, A., Francken, N., Sarris, A., Swinnen, J., Gerber, N., von Braun, J., & Torero, M. (2012). Perspectives on relevant concepts related to food and nutrition security. Foodsecure. https://repository.uantwerpen.be/docman/irua/387cc9/1e0d4585.pdf
Rawlings, L. B., & Rubio, G. M. (2005). Evaluating the impact of conditional cash transfer programs. The World Bank Research Observer, 20(1), 29–55. https://doi.org/10.1093/wbro/lki001
Romer, D. (2012). Advanced macroeconomics (4th ed.). McGraw-Hill.
Saavedra, J. E., & García, S. (2012). Impacts of conditional cash transfer programs on educational outcomes in developing countries: A meta-analysis. Review of Educational Research, 20(10), 1–45. https://doi.org/10.7249/WR921-1
Sawhill, I. V. (2003). The behavioral aspects of poverty. https://www.nationalaffairs.com/storage/app/uploads/public/58e/1a5/035/58e1a5035aa3c281474097.pdf
Skoufias, E., & Di Maro, V. (2008). Conditional cash transfers, adult work incentives, and poverty. The Journal of Development Studies, 44(7), 935–960. https://doi.org/10.1080/00220380802150730
Son, H. H. (2008). Conditional cash transfer programs: An effective tool for poverty alleviation? https://www.adb.org/publications/conditional-cash-transfer-programs-effective-tool-poverty-alleviation
Thomas, R. (2010). Conditional cash transfer to improve education and health: An Ex ante Evaluation of Red de Orotection Social, Nicaragua. Health Economics, 21(10), 1136–1154. https://doi.org/10.1002/hec.2854
Todaro, M. P., & Smith, S. C. (2006). Economic development. Pearson Addison Wesley.
World Bank. (2011). Program Keluarga Harapan: Impact evaluation Report of Indonesia’s household conditional cash transfer program. http://documents.worldbank.org/curated/en/914561468314712643/pdf/476030PUB0Cond101Official0Use0Only1.pdf
AEI-Brookings. (2015). Opportunity, responsibility, and security: A consensus plan for reducing poverty and restoring the American dream. https://www.brookings.edu/articles/opportunity-responsibility-and-security-a-consensus-plan-for-reducing-poverty-and-restoring-the-american-dream/
Afkar, R., & Matz, J. (2015). Cash transfer, in-kind, or both? Assessing the food and nutrition security impacts of social protection programs in Indonesia. AgEcon.
Ajmair, M., & Akhtar, N. (2012). Household consumption in Pakistan (A case study of District Bhimber, AJK). European Journal of Scientific Research, 75(3), 448–457. https://www.econ-jobs.com/research/43049-Estimation-of-Household-Consumtion.pdf
Alam, G. M. (2009). The role of science and technology education at network age population for sustainable development of Bangladesh through Human Resource Advancement. Scientific Research and Essays, 4(11), 1260–1270.
Baird, S., Ferreira, F. H., Özler, B., & Woolcock, M. (2013). Relative effectiveness of conditional and unconditional cash transfers for schooling outcomes in developing countries. Campbell Systematic Reviews, 9(8). https://doi.org/10.4073/csr.2013.8
Barrett, C. B. (2002). Food security and food assistance programs. In Handbook of agricultural economics (Vol. 2, pp. 2103–2190). Elsevier. https://doi.org/10.1016/S1574-0072(02)10027-2
Barrientos, A. (2012). Social transfers and growth: What do we know? What do we need to find out? World Development, 40(1), 11–20. https://doi.org/10.1016/j.worlddev.2011.05.012
Barrientos, A. (2019). The role of social assistance in reducing poverty and inequality in Asia and The Pacific. https://www.adb.org/sites/default/files/publication/525401/sdwp-062-social-assistance-asia-pacific.pdf
Bradshaw, T. K. (2005). Theories of poverty and anti-poverty programs in community development. Journal of The Community Development Society, 38(1), 7–25. https://doi.org/10.1080/15575330709490182
Brady, D. (2018). Theories of the causes of poverty. Annual Review of Sociology, 45, 155–175. https://doi.org/10.1146/annurev-soc-073018-022550
Brugh, K., Angeles, G., Mvula, P., Tsoka, M., & Handa, S. J. F. P. (2018). Impacts of the Malawi social cash transfer program on household food and nutrition security. Food Policy, 76, 19–32. https://doi.org/10.1016/j.foodpol.2017.11.002
Budlender, D. (2014). Conditional cash transfers: Learning from the literature. https://socialprotection-humanrights.org/wp-content/uploads/2016/06/16020912CCTLearning-from-the-LiteratureLR.pdf
Case, K. E., Fair, R. C., & Oster, S. M. (2012). Principles of macroeconomics (10th ed.). Prentice Hall.
Central Bureau of Statistics. (2018). Statistik Pendidikan. Badan Pusat Statistik.
Central Bureau of Statistics. (2019). Statistik Indonesia. Badan Pusat Statistik.
Chakrabarty, M., & Hildenbrand, W. (2011). Engel’s law reconsidered. Journal of Mathematical Economics, 47(3), 289–299. https://doi.org/10.1016/j.jmateco.2011.01.006
Cheema, I., Farhat, M., Hunt, S., Javeed, S., Pellerano, L., & O’Leary, S. (2014). Benazir income support programme. https://www.bisp.gov.pk/SiteImage/Misc/files/BISP_EvaluationReport_Ver%20without_FINAL.pdf
De Brauw, A., & Hodinott, J. (2011). Must conditional cash transfer programs be conditioned to be effective? The impact of conditioning transfers on school enrollment in Mexico. Journal of Development Economics, 96(2), 359–370. https://doi.org/10.1016/j.jdeveco.2010.08.014
Dewan, M.-A.-M. D. (2012). Public expenditure on education and economic growth: The case of Bangladesh. ResearchGate.
Duflo, E. (2012). Women empowerment and economic development. Journal of Economic Literature, 50(4), 1051–1079. https://doi.org/10.1257/jel.50.4.1051
Evans, D. K., Holtemeyer, B., & Kosec, K. (2017). Cash transfers and health: Evidence from Tanzania. The World Bank Economic Review, 33(2), 394–412. https://doi.org/10.1093/wber/lhx001
Ferreira, F. H. G., & Robalino, D. (2010). Social protection in Latin America: Achievements and limitations (Policy Research Working Paper No. 5305). Open Knowledge Repository. https://doi.org/10.1596/1813-9450-5305
Fiszbein, A., & Schady, N. R. (2009). Conditional cash transfers: Reducing present and future poverty. World Bank Group. https://doi.org/10.1596/978-0-8213-7352-1
Gaarder, M. M., Glassman, A., & Todd, J. E. (2010). Conditional cash transfers and health: Unpacking the causal chain. Journal of Development Effectiveness, 2(1), 6–50. https://doi.org/10.1080/19439341003646188
Gertler, P. (2000). The impact of PROGRESA on health (Final Report). International Food Policy Research Institute. https://ebrary.ifpri.org/digital/collection/p15738coll2/id/125436
Gitter, S. R., & Caldes, N. (2010). Crisis, food security, and conditional cash transfers in Nicaragua. http://webapps.towson.edu/cbe/economics/workingpapers/2010-07.pdf
Glassman, A., Todd, J. E., & Gaarder, M. (2007). Performance-based incentives for health: Conditional cash transfer programs in Latin America and The Caribbean. SSRN. https://doi.org/10.2139/ssrn.1003250
Heimo, L. (2014). The idea of conditional cash transfers. Trepere University. https://trepo.tuni.fi/handle/10024/95900
Hoddinott, J., & Skoufias, E. (2004). The Impact of PROGRESA on food consumption. Economic Development and Cultural Change, 53(1). https://doi.org/10.1086/423252
Hofman, B., Rodrick-Jones, E., & Thee, K. W. (2004). Indonesia: Rapid growth, weak institutions. http://documents1.worldbank.org/curated/en/576941468774895009/pdf/307800IND0country01see0also0307591.pdf
Hyman, D. N. (2010). Public finance: A contemporary application of theory to policy (10th ed.). North Carolina State University.
Kamakura, W. A., & Mazzon, J. A. (2015). Measuring the impact of a conditional cash transfer program on consumption behavior with propensity scoring. Customer Needs and Solutions, 2(4), 302–316. https://doi.org/10.1007/s40547-015-0037-0
Khandker, S., Koolwal, G., & Samad, H. (2010). Handbook on impact evaluation: Quantitative methods and practices, the international bank for reconstruction and development. The World Bank. https://doi.org/10.1596/978-0-8213-8028-4
Lanjouw, P., Pradhan, M., Saadah, F., Sayed, H., & Sparrow, R. (2001). Poverty, education, and health in Indonesia: Who benefits from public spending? Open Knowledge Repository. https://doi.org/10.1596/1813-9450-2739
Lindert, K., Linder, A., Hobbs, J., & De la Brière, B. (2007). The nuts and bolts of Brazil’s Bolsa Família Program: Implementing conditional cash transfers in a decentralized context. https://documents1.worldbank.org/curated/en/972261468231296002/pdf/398530SP1709.pdf
Maluccio, J. A. (2010). The impact of conditional cash transfers on consumption and investment in Nicaragua. The Journal of Development Studies, 46(1), 14–38. https://doi.org/10.1080/00220380903197952
Mankiw, N. G. (2016). Macroeconomics (9th ed.). Worth.
Ninno, C. D., & Dorosh, P. (2003). Impacts of in-kind transfers on household food consumption: Evidence from targeted food programmes in Bangladesh. The Journal of Development Studies, 40(1), 48–78. https://doi.org/10.1080/00220380412331293667
Pangaribowo, E. H. (2012). The impact of ‘rice for the poor’ on household consumption. In 56th Conference. Australian Agricultural and Resource Economics Society.
Pieters, H., Vandeplas, A., Guariso, A., Francken, N., Sarris, A., Swinnen, J., Gerber, N., von Braun, J., & Torero, M. (2012). Perspectives on relevant concepts related to food and nutrition security. Foodsecure. https://repository.uantwerpen.be/docman/irua/387cc9/1e0d4585.pdf
Rawlings, L. B., & Rubio, G. M. (2005). Evaluating the impact of conditional cash transfer programs. The World Bank Research Observer, 20(1), 29–55. https://doi.org/10.1093/wbro/lki001
Romer, D. (2012). Advanced macroeconomics (4th ed.). McGraw-Hill.
Saavedra, J. E., & García, S. (2012). Impacts of conditional cash transfer programs on educational outcomes in developing countries: A meta-analysis. Review of Educational Research, 20(10), 1–45. https://doi.org/10.7249/WR921-1
Sawhill, I. V. (2003). The behavioral aspects of poverty. https://www.nationalaffairs.com/storage/app/uploads/public/58e/1a5/035/58e1a5035aa3c281474097.pdf
Skoufias, E., & Di Maro, V. (2008). Conditional cash transfers, adult work incentives, and poverty. The Journal of Development Studies, 44(7), 935–960. https://doi.org/10.1080/00220380802150730
Son, H. H. (2008). Conditional cash transfer programs: An effective tool for poverty alleviation? https://www.adb.org/publications/conditional-cash-transfer-programs-effective-tool-poverty-alleviation
Thomas, R. (2010). Conditional cash transfer to improve education and health: An Ex ante Evaluation of Red de Orotection Social, Nicaragua. Health Economics, 21(10), 1136–1154. https://doi.org/10.1002/hec.2854
Todaro, M. P., & Smith, S. C. (2006). Economic development. Pearson Addison Wesley.
World Bank. (2011). Program Keluarga Harapan: Impact evaluation Report of Indonesia’s household conditional cash transfer program. http://documents.worldbank.org/curated/en/914561468314712643/pdf/476030PUB0Cond101Official0Use0Only1.pdf