Children's Schooling and Work in the Presence of a Conditional Cash Transfer Program in Rural Colombia

The conditional cash transfer (CCT) Familias en Acción program is aimed at reducing poverty by promoting human capital accumulation among the poorest households in Colombia. It is modeled on the Mexican PROGRESA and includes conditional subsidies for investments into education, nutrition, and health. The program contributed to human capital accumulation via increasing enrollment in school. The increased participation in school came at the expense of some other work- or leisure-related activities children were formerly engaged in. The short-term impact on children's welfare of increased school enrollment rely on whether the CCT program reduced time spent by children in work-related activities in relation to their leisure time. The biggest substitution effects are noticed among children aged 14-17 in urban areas and for children aged 10-13 in rural areas, for whom more than one-quarter of the increase in time spent at school could have been spent on work activities.