Evaluating service supply in conditional cash transfers

Conditional cash transfers are poverty reduction mechanisms that seek to increase demand of social services by combining an income effect with a health or education requirement. This demand-side strategy relies on a tacit assumption about the quality of and access to those services as a path to improve human capital outcomes. Some conditional cash transfers have included supply-side complementary incentives to ensure that services are suitable to deliver a good education and better health. This study reviews the existing evidence on the impact of supply-side incentives in the context of conditional cash transfers. The review finds that a limited number of studies estimate effects of supply in human capital outcomes and only a few impact evaluations consider the role of schools or health centers in enabling access. The evaluations revised find no evidence that supply side interventions coupled with conditional cash transfers directly improve program outcomes. Nonetheless, several studies highlight the relevance of school organization, in terms of school modalities and student/teacher ratios in school enrollment and attendance. Impact estimations as well as the implementation of the supply-side programs also signal the need for a more nuanced understanding of how school management influences a variety of schooling outcomes. In general, the small number of impact estimations and the restricted set of variables used limits the generalizability of the results. For this reason, a principal conclusion of the review is the need for further research on the topic, as well as consistency across impact measures and a more in-depth analysis of school supply and their influence on learning outcomes.