Conditional cash transfers do not immediately reduce child labour

By: Dr. Romi Bhakti Hartarto

Child labour remains a pressing issue in various parts of the world. Global estimates from the International Labour Organization (ILO) in 2016 indicated that the Asia-Pacific region ranked second-highest after sub-Saharan Africa in terms of child labour prevalence among those aged 5 to 17, with a rate of 7.4% or approximately 62 million children. Furthermore, hazardous child labour accounted for 28 million or 3.4% of this total, with nearly 60% working in the agricultural sector. While there has been a declining trend in child labour since 2012, addressing child labour has become a focal point for world leaders, aligning with sustainable development goals due to the long-term consequences it poses not only on physical health but also on mental and psychological well-being, thereby impacting a country’s human resources on a large scale.

Economically driven factors often force children to drop out of school and contribute to their family’s income. Over the past two decades, some countries have implemented social protection programs to curb child labour, with conditional cash transfer (CCT) programs being one such initiative. By providing financial assistance to low-income households, these programs require recipient children to stay in school and continue their education to a certain level.

Essentially, CCT programs can contribute to reducing child labour through two mechanisms. First, the programs alleviate the financial burden of education expenses, such as school fees, books, and uniforms, making education more accessible to children from low-income families and preventing them from working to support their families. Second, these programs require recipient children to stay in school, reducing the time available for them to engage in labour activities. A study in Colombia found that conditional cash transfer programs could increase school attendance and indirectly reduce the number of hours children spend working. In the long run, CCT programs are believed to enhance positive workforce outcomes by facilitating the transition from informal to formal employment, thereby increasing the income of poor families.

However, not all conditional cash transfers have the desired impact on reducing child labour. Studies indicate that conditional cash transfers in the Philippines increased child labour participation. This is because the provided cash assistance was insufficient to cover the costs of schooling, making it less effective in preventing children from working to earn additional income to meet educational expenses. This finding is supported by other studies highlighting the weak trade-off between school hours and working hours. The increase in school attendance due to the program did not necessarily decrease children’s working hours. This is attributed to the program’s requirement for recipient households to enrol their children in school without explicitly prohibiting them from working. A similar situation occurs in Indonesia, where conditional cash transfers have no effect on child labour participation among recipients, despite an increase in school enrolment. This is because attending primary school classes does not bring significant financial benefits in the short and medium term.

In general, the combination of low cash amounts and less comprehensive conditions makes CCT programs less effective in reducing child labour participation. Policymakers should prioritize improving the design, structure, and cash amounts of these programs. Increasing the budget allocated to these programs can address financial challenges faced by low-income households. Additionally, governments need to adopt a more comprehensive approach by considering other

factors influencing child labour, not solely focusing on providing cash assistance to poor families. Improving the quality and accessibility of education for all children can have a more significant impact on reducing child labour. Efforts in this direction are expected not only to curb child labour rates but also to create a safer and more prosperous future for all children.

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The author is a Postdoctoral Research Fellow at Ungku Aziz Centre for Development Studies, Universiti Malaya, and an Assistant Professor at the Department of Economics, Universitas Muhammadiyah Yogyakarta, Indonesia.