[VIDEO] Conditional Cash Transfer, Loss Framing, and SMS Nudges: Evidence from a Randomised Field Experiment in Bangladesh

Cash transfers conditional on school attendance have gained increasing popularity over the past couple of decades. This study seeks to shed light on two issues that may complement such conditional cash transfers (CCTs): (i) loss framing of awards and (ii) SMS information nudges. SMS information on children’s school attendance as well as an endowment effect stemming from loss aversion may help increase the effectiveness of CCT in incentivizing parents to send children to school. We conduct a randomized controlled trial among secondary school students in Bangladesh by assigning them to four treatment arms: a pure control group, an SMS only treatment group, an SMS plus gain framing CCT, and an SMS plus loss framing CCT. While CCT significantly increases school attendance, the loss framing only marginally helps increase attendance over and above the gain framing. Our findings suggest that though SMS information nudges have a more modest impact on school attendance, they are more cost effective than the CCT treatment arms. Variation in treatment amount during the course of our intervention suggests that the intensive margin matters, and CCTs are able to address issues such as absenteeism during harvesting season. We also find evidence of positive peer group effect in attendance, and the treatment effects are quite similar once such social network interactions are controlled for. Finally, though our treatment assignment does not have any impact on incidence of child labour, the loss and SMS treatment arms delay child marriage for girls.