In Simple Words
When a low-income family receives free school supplies, the money saved eases their tight overall family budget. Rather than spending every saved dollar to buy even more books, the family allocates the extra money to satisfy other urgent needs like nutrition, healthcare, or home repairs.
Pupils in Andhra Pradesh primary schools
- No extra block grant
- Comparison group
- Extra block grant
- Families offset 76% of the grant
Second year, when grants were expected. The 76% offset is estimated at average spending; how families used the saved money was not measured.
See source →Research question
Policymakers assume poor, credit-constrained households will use public education transfers to expand overall educational consumption rather than redirecting funds. When public transfers relax a household's general budget constraint, families spread the gains across multiple competing basic needs rather than concentrating them on education.
Participants
37,004 student-year observations across 200 primary schools in rural Andhra Pradesh, India.
Study Design
Household survey tracking expenditure reallocations across credit-constrained families under randomized block grant exposure.
Results
Even among poor households with spending near baseline levels, 88 percent spent more than the grant amount (Rs 125/year), allowing anticipated grants to relax general budget constraints and result in a 76% private expenditure offset (elasticity of -0.21, p < 0.01).
Takeaway
Evaluate household-level liquidity and non-educational expenditure needs when designing in-kind educational subsidies for low-income populations.
Source and citation
See source →Read alongside the research
Plain-English glossary
Original explanations, informed by the references below. Examples are illustrations, not data from the studies above. The research text stays unchanged.
- Baseline
The starting measurements in a study. Researchers use these to compare what participants were like at the start with what happens later.
ExampleBefore a training programme starts, researchers measure workers’ earnings. That first measurement is the baseline.
GET-IT glossary · Baseline characteristics ↗Read more about baseline →