Effects of Cash Transfers on Child Labor Across Parental Working Sectors: Evidence From Indonesia
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Abstract
This study examines whether the effect of conditional cash transfers on child labor varies by the household head’s working sector and occupation type. Using the March 2023 Indonesian National Socio-Economic Survey, we analyze 180,515 children aged 10–17 in households with an employed head. We estimate the effect of Program Keluarga Harapan (PKH) using a recursive bivariate probit, weighted to the population and clustered at the primary sampling unit. We test the exclusion restrictions directly and use inverse-probability-weighted regression adjustment and propensity-score matching as robustness checks. In the preferred specification, the estimated reduction in child labor is 3.2 percentage points and is not statistically significant (p = .101). Both robustness estimators agree in sign and place the reduction below half a percentage point. We find no statistical evidence that the effect on child labor differs by the household head’s working sector, occupation type, or the child’s sex. Among PKH recipients, additional receipt of Program Indonesia Pintar, an education-specific transfer conditional on school enrollment, is associated with a 4.1-percentage-point higher probability of school attendance (p = .009). Overall, the design and combination of transfers may matter more than cash receipt alone.
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