Compensation vs. Reinforcement: Experimental Identification of Parental Aversion to Inequality in Offspring

The allocation of resources within the household has been extensively theorized, but empirical evidence on this topic has been very scarce. Endogeneity concerns hinder this type of analysis due to the lack of identifying variation within the household. In this paper, we overcome these difficulties by exploiting a unique setting that introduced random variation in resource allocation within households. We evaluate the effects of a program that provided alternative delivery methods of conditional cash transfers in Bogotá, Colombia, and allocated resources at the student level. The individual randomization implied that some households had treated and untreated siblings, allowing us to extend the analysis to estimate spillover effects of the program on beneficiaries and their siblings. Students were randomly allocated to a standard design and a design that prioritized enrollment in tertiary education. We find that standard delivery methods increase educational outcomes for treated children but decrease the same outcomes for untreated siblings of treated students. We rationalize the results by estimating a structural model that uses the standard delivery method for estimation and the alternative delivery method for validation.