The differential impact of educational cash transfers on child labor and schooling: insight from Indonesia

This study assesses the association between educational cash transfers on child labor and school participation in Indonesia. Using This study examines the association between educational cash transfers and children’s labor and schooling outcomes in Indonesia using nationally representative microdata from National Socioeconomic Survey (Susenas) 2023, covering 161,651 children aged 10–17. It compares conditional transfers (PKH) and labeled unconditional transfers (PIP) across four activity categories: only working, only schooling, dual activity, and neither working nor schooling. Employing a multinomial logit model, the findings indicate that PIP is strongly associated with reduced child labor and increased exclusive school participation, particularly among urban and economically disadvantaged households. While PKH also reduces labor incidence, it is more frequently linked to dual activity, reflecting ongoing financial constraints among beneficiary households. The results further reveal gender and spatial disparities, with boys and rural children more likely to engage in labor. Notably, PIP is associated with a lower proportion of idle children. These findings underscore the importance of adaptive and context-sensitive program design. The study contributes to the social protection literature by highlighting the role of educational transfers in improving child welfare and learning outcomes. It recommends integrated policies combining financial support with enhanced educational access and childcare provision.