In the second half of the 1990’s, student grades in Ecuador started to fall. In response, the government set up a conditional cash transfer program for poor families which would pay parents for making sure their children attended school for a predefined number of days.
While most research has shown that the cash payment program has indeed increased attendance levels, there’s little known about how students performed.
Now, Ecuadorian economist Juan Ponce and Arjun Bedi of the Institute for the Study of Labor have run the numbers and conclude that there was no positive (or negative) impact on grades from the incentive pay program.