The impact of conditional cash transfers on public education expenditures: A political economy approach

- CCT programs may affect the political economy of public education expenditures.
- In Brazil and Mexico, CCT altered the pivotal voter's identity and income level.
- CCT led to larger public education expenditures per student in Brazil and Mexico.
- In Colombia, the pivotal voter was not eligible for the CCT program.
- Colombian public school spending per student was stable after CCT implementation.

We investigate the impact of conditional cash transfers (CCT) on the level of public education expenditures chosen by majority voting. In our model, parents may send their children to work, instead of sending them to (public or private) school. CCT may affect the choice of tax rate by altering the identity and/or the income level of the pivotal voter. Our simulation results explain the increase in education expenditures observed in Mexico and Brazil following the implementation of CCT programs. In Colombia, the pivotal voter is not eligible for the CCT program, which led to the relative stability in education expenditures per student.