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The Schooling Decision: Family Preferences, Intergenerational Conflict, and Moral Hazard in the Brazilian Favelas

Leonardo Bursztyn and Lucas C. Coffman
Journal of Political Economy
Vol. 120, No. 3 (June 2012), pp. 359-397
DOI: 10.1086/666746
Stable URL: http://www.jstor.org/stable/10.1086/666746
Page Count: 39
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The Schooling Decision: Family Preferences, Intergenerational Conflict, and Moral Hazard in the Brazilian Favelas
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Abstract

This paper experimentally analyzes the schooling decisions of poor households in urban Brazil. We elicit parents’ choices between monthly government transfers conditional on their adolescent child attending school and guaranteed, unconditional transfers of varying sizes. In the baseline treatment, an overwhelming majority of parents prefer conditional transfers to larger unconditional transfers. However, few parents prefer conditional payments if they are offered text message notifications whenever their child misses school. These findings suggest important intergenerational conflicts in these schooling decisions, a lack of parental control and observability of school attendance, and an additional rationale for conditional cash transfer programs—the monitoring they provide.

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