An Empirical Investigation of the Effect of Cash Transfers on Child Labour and Schooling in Rural Kenya

Abstract

The widespread occurrence of child labor, frequently influenced by economic vulnerabilities and poverty, presents a substantial obstacle to educational access. Children involved in diverse labor activities, including agriculture and domestic tasks, become ensnared in a cycle where the need to contribute to household income restricts their consistent attendance at school. Although there have been legislative initiatives and programs such as the Orphan and Vulnerable Children Cash Transfer Program aimed at easing economic difficulties, there remains a significant shortfall in understanding how these interventions impact child labor and education in rural Kenya. The specific objectives include; to explore the patterns of cash transfers and schooling in rural Kenya, determine the effect of cash transfers on child labor, establish the impact of cash transfers on schooling, and provide policy suggestions. The study relied on the 2022 Kenya Demographic and Health Survey (KDHS) dataset. Employing a mix of descriptive analysis and regression techniques, the study considers independent variables; cash transfers, birth order of the child, Sex of the child, age, household head income, household size, and education level of household head, and dependent variable; child labour and child schooling. The analysis employed Probit regression model to estimate parameter coefficients. From the findings, cash transfer programs exhibited a positive and statistically significant effect on child schooling, indicating their potential to enhance educational opportunities. Conversely, the study found a negative and significant association between cash transfers and child labor, suggesting a promising role in mitigating child labor in vulnerable households. In the child labor model, other variables such as household head income, household size, and the education level of the household head emerged as statistically significant contributors. In the child schooling model, significant variables included birth order, age and child’s sex, at the last birthday, and household size. Based on the findings of this study, several recommendations can be proposed to inform policy and practice in addressing child labor and enhancing child schooling in rural Kenya: The significant and positive impact of cash transfers on these outcomes suggests the need for an optimized and expanded approach to existing programs. The direction of effect, particularly the reduction in child labor and improvement in child schooling associated with increased cash transfers, provides a clear impetus for policymakers to prioritize and strengthen these initiatives. For optimal effectiveness of cash transfer programs, it is recommended to implement targeted interventions. By pinpointing and concentrating on households exhibiting specific risk factors, such as lower income levels and larger household sizes, interventions can be customized to tackle the distinct challenges encountered by these vulnerable groups.