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Unlike performance incentives for private sector managers, little is known about performance incentives for managers in public sector bureaucracies. Through a randomized trial in rural China, we study performance incentives rewarding school administrators for reducing student anemia—as well as complementarity between incentives and orthogonally assigned discretionary resources. Large (but not small) incentives and unrestricted grants both reduced anemia, but incentives were more cost-effective. Although unrestricted grants and small incentives do not interact, grants fully crowd-out the effect of larger incentives. Our findings suggest that performance incentives can be effective in bureaucratic environments, but they are not complementary to discretionary resources.

Colombia’s national early childhood strategy launched in 2011 aimed at improving the quality of childcare services offered to socio-economically vulnerable children, and included the possibility that children and their childcare providers could transfer from non-parental family daycare units to large childcare centers in urban areas. This study seeks to understand whether the offer to transfer and the actual transfer from one program to the other had an impact on child cognitive and socioemotional development, and nutrition, using a cluster-randomized control trial with a sample of 2767 children between the ages of 6 and 60 months located in 14 cities in Colombia. The results indicate a negative effect of this initiative on cognitive development, a positive effect on nutrition, and no statistically significant effect of the intervention on socioemotional development. We also explored the extent to which these impacts might be explained by differences in the quality of both services during the transition, and report that quality indicators are low in both programs but are significantly worse in centers compared to community nurseries.

A large literature examines performance pay for managers in the private sector, but little is known about performance pay for managers in public sector bureaucracies. In this paper, we study performance incentives rewarding school administrators for reducing anemia among their students. Randomly assigning 170 schools to three performance incentive levels and two orthogonal sizes of unconditional grants, we analyze performance pay and its complementarity with discretionary resources. We find that both large incentives and larger unconditional grants reduced anemia substantially, but incentives were more cost-effective. Performance incentives led administrators to innovate by working with parents, mitigating potentially offsetting compensatory behavior among households. Strikingly, we also find that larger unconditional grants completely crowded-out the effect of incentives. Our findings suggest that performance incentives can be effective in bureaucratic environments – but also that discretionary resources can fully crowd-out their effect.

This paper investigates the effect of health shocks on household consumption and child nutrition. Using longitudinal data from rural Colombia we find that several items of household consumption, including medical expenditure, food consumption, and total consumption, increase following a recent illness event of an adult usually active in the labour market. In contrast to this, we find that girls¿ weight is negatively affected, as a consequence of the same illness event. The results on nutrition present an interesting gender bias, since we do not find any evidence that boys¿ nutritional status deteriorates. Our conclusion is that households make difficult intrahousehold choices when an illness shock hit them. The results have implications for the literature on testing for full insurance because it usually relies on household consumption net of medical expenditures as a measure of welfare. This fact shows that this literature might has underestimated the effects of health shocks on welfare. Este artículo investiga los efectos de los shock de salud sobre el consumo de los hogares y la nutrición infantil. A partir de una base de datos longitudinal que corresponde a datos del área rural de Colombia encontramos que varios elementos del consumo de los hogares, incluidos gastos médicos, consumo de alimentos y consumo total del hogar, aumentan después de que una reciente enfermedad afecte a un adulto del hogar activo en el mercado de trabajo. En contraposición a este resultado, encontramos que la nutrición de los niños se ve negativamente afectada. En concreto el peso de las niñas se reduce tras este shock de salud. Este resultado sobre nutrición presenta un interesante sesgo de género, ya que no encontramos evidencia de un deterioro nutricional en los niños. Nuestra conclusión es que los hogares tienen difícil elecciones dentro de los hogares cuando un shock de salud les sacude. Este resultado tiene implicaciones para la literatura que prueba la cobertura total de los hogares ya que esta atiende únicamente al consumo de los hogares, neto de los gastos médicos, como medida de bienestar. Este hecho muestra que esta literatura podría estar subestimando los efectos de los shock de salud sobre el bienestar de los hogares.

In this paper we provide a model and data structure to identify the determinants of health care use by low income children, and the channels through which they operate. The most distinguishing feature of our approach is that we decompose the decision to use health care into three stages. The advantage of our approach is that variables can influence each stage differently. We find that children living in towns with higher prevalence of violence are in higher need of health care but violence decreases the probability that the child will use health care conditional of the mother perceiving that health care will provide positive gross benefits. We also find that knowledge about self-care (measured by the percentage of women in the village that knows how to treat diarrhoea and by mother’s education) decreases the probability that the mother perceives positive gross profits of obtaining health care. These relations are unmasked if we use a standard Probit model.

This paper develops an empirical strategy to estimate whether subsidies to private medical insurance are self-financing in countries where public and private health insurance coexist. We construct a simulation routine based on a micro econometric discrete choice model that allows us to evaluate the impact of premium changes on the utilisation of outpatient and inpatient health care services. As an application, we simulate the main feature of the 1999 Spanish income tax reform that abolished the individual tax deduction for expenditures on private health insurance. We find evidence suggesting that the fiscal subsidy is far from self-financing. This result is driven by the fact that private medical insurance holders make concurrent use of public services and by the low price elasticity of the demand for policies. We are grateful to Andrew Jones and the YSHE group for useful comments and support. All remaining errors are the only responsibility of the authors. López-Nicolás thanks the Spanish DGES (project PB98- 1058-C03-01) and the Fundación BBVA for financial aid under the project “La dinámica del estado de salud y los factores socieconómicos a lo largo del ciclo vital. Implicaciones para las políticas públicas”. Vera- Hernández gratefully acknowledges financial support from a Marie Curie Fellowship of the European Community program Improving Human Research Potential and the Socioeconomic Knowledge Base under contract HPMF-CT-2001-01206.

We show that children who are born at or just before the weekend are less likely to be breastfed, owing to poorer breastfeeding support services in hospitals at weekends. We use this variation to estimate the effect of breastfeeding on children's development in the first seven years of life, for a sample of births of low-educated mothers. We find large effects of breastfeeding on children's cognitive development but no effects on health or noncognitive development during the period of childhood we consider. Regarding mechanisms, we study how breastfeeding affects parental investments and the quality of the mother-child relationship. (JEL I12, I14, I18, J13, J16, J24)

Community-based group interventions are a cost-effective way of delivering programs in low-income settings. Design features may influence behaviors beyond those targeted by the intervention. This paper studies spillover effects of a participatory community health intervention in rural Malawi, implemented through a cluster randomized control trial, on an untargeted outcome: consumption smoothing after crop losses. While crop losses reduce consumption growth in the absence of the intervention, households in treated areas compensate for this loss and perfectly insure their consumption. We rule out better self-insurance and labour supply adjustments as drivers, indicating that informal risk sharing must have improved. Suggestive evidence shows that health improvements cannot explain the whole effect and instead social interactions, which may have alleviated contracting frictions had a role to play.