On the Design of Educational Conditional Cash Transfer Programs and Their Impact on Non-Education Outcomes: The Case of Teenage Pregnancy

Using a simple model to characterize adolescents' behavior, we show that the effect of educational Conditional Cash Transfer (CCT) programs on teenage pregnancy depends on the limits and conditions of the programs. The model shows that when benefits are conditional on school success or when the program has a binding duration limit, the CCT reduces teenage pregnancy rates. Using original data, we estimate this relation for two different CCT programs implemented in Bogota, Colombia. The two programs differ in that only one of them conditions benefit renewal on school success. The empirical results are consistent with the predictions of the model. Only the program that conditions renewal of the transfer, reduces average teenage pregnancy rates. We also find that, also consistent with our model, the other program reduces teenage pregnancy rates only for those girls for which the duration limit is binding.