Conditional cash transfers, spillovers and informal health care: Evidence from Peru

Conditional cash transfer programs have become instrumental in encouraging the use of formal health services in developing countries, but little is known about their effect on the use of low‐quality informal care. Using a large survey of Peruvian rural households and a regression discontinuity design, we find a sizeable reduction in the use of informal health care providers not only by targeted but also by non-targeted members of households that qualify for the program. This indicates the existence of spillover effects within the household. We also provide evidence that beyond the direct increase in income, the availability of better information about institutional services is a potential mechanism that drives these effects.