This study aims to evaluate the impact of an early commitment of Conditional Cash Transfer program on high school completion of poor students. The program promised that the research team would provide 1500 yuan per year in cash transfer to roughly cover the cost of three years of high school tuition if the first-year junior high school student was actively enrolled in a 3-year vocational or academic high school program three years later. We use a panel data set of 1892 poor first-year students, collected between 2010 and 2016, from 132 rural junior high schools in 15 counties in Shanxi and Hebei provinces. We find that the completion rate of high school is less than 50 percent among poor students in 2016. However, the program has no effect on the general completion rate of academic high school, vocational high school, or neither of them. There are two possible reasons. Firstly, the academic performance of students was too low to meet the requirement of matriculating into academic high school, which were the plans of most poor students. Meanwhile，poor student did not enroll in vocational high schools, a secondary choice for most students, because the funding level of the program is far below the direct cost and opportunity cost of attending high schools. Secondly, economic factor was not the primary concerns of students for staying at school or not as soon as they entered high schools. Thus, we suggest to improve the quality of compulsory education in rural China to make poor students competitive in high school entrance exams and increasing the amount of financial aid to poor students to account for rising direct cost and opportunity cost of attending high schools.

Keywords: Early Commitment of Conditional Cash Transfer, High School Completion, Poor Students, Rural Area

Corresponding author: Hongmei Yi, hmyi.ccap@pku.edu.cn