The kindergarten attendance allowance in Hungary : an evaluation of a conditional cash transfer program

This paper evaluates the kindergarten attendance allowance program in Hungary, a conditional cash transfer (CTT) program introduced in 2009 that aimed to increase kindergarten enrollment of disadvantaged children aged 3 and 4. Administration of the program was decentralized, and we make use of the substantial regional variation in program take-up across municipalities to estimate the program's effect on enrollment rates. We show modest but non-negligible effects, despite problems related to the manner of the program's implementation. We also show that the effects were significantly stronger in areas characterized by an excess supply of kindergarten slots. The results testify to the potential of CCT programs to create demand for child-care services among disadvantaged families; however, the results also highlight the importance of creating an adequate supply of kindergarten facilities where needed.