In Mexico there is a government program named Oportunidades which gives families cash payments if their children go to school, get vaccinated, and have regular health checkups. The program has been a success and similar conditional cash transfers (CCTs) programs are being run in Nicaragua, Brazil and New York City.
New York City? Should the NYC government pay for local children to go to school? On the one hand, this will likely increase school attendance and decrease the number of drop outs. On the other hand, the government is paying residents to do certain actions which seems to be a very paternalistic attitude.
The Economist reports (“When bribery pays…“) that CCTs have been used in other settings as well:
Offering cash to change long-term bad habits, such as smoking or over-eating, has not worked. But disbursements tied to short-term transactions, such as getting drug addicts to take treatments for tuberculosis or depressed patients to see their psychiatrists, have already shown promise.
While paying children to go to school is not in and of itself a bad idea, I am concerned that the government will continue to pay people to do things that it thinks are in its best interest. If we want to decrease inequality in society, it would be much better to increase cash transfers to the poor and allow them to decide for themselves what they should do with the money.