Intermediate Target Conditioning
RCTClinical Trial
Attaching financial incentives to intermediate process steps (such as attending counselor meetings) increases attendance, but does not guarantee that participants make downstream efforts required to achieve employment goals. When incentives are tied strictly to process compliance rather than ultimate outcomes, participants fulfill baseline attendance requirements without increasing human capital investments or job search intensity.
Picture this
Imagine paying students money every time they sit in a classroom, but offering no incentives for passing tests or completing homework. Students will show up and occupy seats to collect the reward, but sitting in a chair does not compel them to study or learn the material. In the same way, paying jobseekers solely for attending advisory meetings increases meeting attendance, but fails to motivate them to complete training courses or accept job offers.
What the evidence says
Cash transfers increased total months in the program by 7.9 months (ITT, p < 0.01) from a control mean of 11.4 months, and total counselor meetings by 5.3 (ITT, p < 0.01) from a control mean of 7.3. Information exposure increased by 48% (p < 0.01), yet the estimated treatment effect on the standardized human capital investment index and final employment outcomes was precisely zero.
- Who was studied
- N = 5,498 young unskilled jobseekers aged 18–22 across 82 Job Youth Centers in France (2,661 assigned to cash transfer treatment, 2,837 assigned to control).
- How
- Nationwide randomized controlled trial (RCT) with within-center randomization comparing standard guidance (CIVIS) against guidance plus conditional cash transfers up to €4,800 over two years (€250/month in year 1).
What to do
Design conditional cash transfer programs by tying financial disbursements directly to verifiable outcome milestones (such as certified course completions or job contract signatures) rather than intermediate process attendance metrics.
From the source
"Cash transfers lead to a significant increase in program participation (which mainly entails meetings with counselors), and sharply reduced drop-out rates. As a result, there is a large increase in the job offers, vocational training and career building workshops proposed to the young jobseekers. However, the jobseekers' response to these increased opportunities for employability investment is a precisely estimated zero."
Conditional_Cash_Transfers_on_the_Labor_Market_Evidence_from_Young.pdf