Indonesia’s unconditional cash transfers likely reduced school participation among children of internal migrants by relaxing parental migration credit constraints.
We examine how parental migration interacts with unconditional cash transfers (UCTs) for education by analyzing Indonesia’s Smart Indonesia Program (PIP), which provides educational grants to children from poor households. Using a difference-in-differences approach and nationally representative data, we examine whether the program improved school participation among children left behind by temporary migrant parents, with the results showing that, contrary to expectations, school participation declined for these children in treated regencies. To address potential endogeneity, we explore the role of migrant networks and find that in areas where they are strong, PIP grants likely facilitated parental migration, exacerbating both financial and emotional barriers to education. These findings highlight the importance of accounting for migration dynamics when designing education-focused cash transfer programs.