Keeping Girls in School

A scholar friend sent this to me in a private email:

A colleague here at Wits has received a request to help design a policy intervention that can halve the girl's drop out rates due to pregnancy, by half in two years. He is toying with the idea of a cash transfer to every girl who graduates who gets to fourth form by age of 18 without getting pregnant. He would like to pay the girls 400 rand more than they are paid for child, care at present. Do you think a 400 rand more is a stronger incentive that can keep a class eight girls till form four? Or will it become a perverse incentive that would account for increased abortion rates two years down the line? How and when do cash transfer work as a policy tool?

My Quick Response:

That appears to be a serious attempt to respond to a policy problem and I think it can be designed to work well.

However, it needs to be clarified whether the intention is to reduce the drop out rate alone or to delay early motherhood. The good thing is that both are related because early motherhood does end school attendance. It would be good to review figures to confirm this assumption.

If it is true that early motherhood is a major contributor to drop out rates then we could concentrate on dropping either and hope to get the same result.

My concern though is that incentives are okay but two years are hardly enough to cut rates by 50% irrespective of where the starting line is. There's no reason to make for such an ambitious deadline regarding motherhood because a delay of only a couple of years cannot be used to declare victory. I think that this must be done through a whole primary and secondary school cycle i.e 12 years so that we can determine whether the factors that drop rates at one level necessarily work for the other.

In my view, the design should take advantage of loss aversion tendency. This requires banking the chosen sum say 400 rand now in the girl's name and the sum together with the principal is to be collected upon completion of fourth form. In this way, the behavioral incentive is bound to be stronger because the individual will have to give back that money. This is far better than the mere expectation of the sum at the end of a long cycle.

Regarding abortion, that is bound to happen because of the need to claim the funds by cheating as well. However, it is dependent on what the relative costs of abortion to the final sum are in order to justify that arbitrage. Indeed, this perverse incentive could be made stronger with the sharp two year deadline.

Finally, it is not easy to tell what level of incentive would result in the behavior change required above but I consider that financial incentives are likely to create a decent level of change. So the way to do this is to start it as a randomized experiment involving a significant number of girls in order to isolate the effects of the financial incentives and determine what the relative price of such a delay is. On the whole, I am glad that this being considered and I would like to find out what the final decision is. Keep me in the know.

I will post further information on this.