Conditional cash transfer against child labor: Indonesia Program Keluarga Harapan

This study aims to analyze whether subsidies provided by the Indonesian conditional cash transfer against child labor program (Program Keluarga Harapan: PKH) were sufficient for children to stop working and go back to schooling. Ex-post evaluations of the program found that it did not improve children’s enrollment rate and reduce child labor significantly. To search out reasons, this study analyzed the financial returns, on the short-, medium-, and long-term bases, of the children who attend school by participating in the program, in comparison with those children who did not attend school. The data for the analysis were obtained from the Indonesia Family Life Survey data from the RAND Corporation and Indonesian government statistical data. The results demonstrated that the financial returns to children joining PKH to attend primary school were lower than those of their non-participating counterpart in the short and medium terms. Only in the long term, the financial returns to most program participants were greater than those of non-participating counterparts. The subsidy was too low and short to make children attend school, driving children to workplaces. Therefore, this study recommends that the government extend the subsidy period and sensitize poor family parents, or reduce their burden of educational expenditures by awarding them scholarships for their children’s education, or combine both policy actions.