DP6069 Effects on School Enrollment and Performance of a Conditional Cash Transfers Program in Mexico

Author(s): Alain de Janvry, Pierre Dubois, Elisabeth Sadoulet
Publication Date: January 2007
Keyword(s): dynamic decisions, education demand, Mexico, randomized experiment, school performance, schooling decisions, transfer program, treatment effects
JEL(s): C14, C25, D91, H52, H53, I21, I28, J24
Programme Areas: Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=6069

We study the effects of a conditional cash transfers program on school enrollment and performance in Mexico. We provide a theoretical framework for analyzing the dynamic educational process including the endogeneity and uncertainty of performance at school (passing grades) and the effect of a cash transfer program conditional on school attendance. This framework is developed to study the Mexican social program Progresa (called now Oportunidades) in which a randomized experiment has been implemented and allows us to identify the effect of the program on enrollment and performance at school. Using the rules of the conditional program, we can explain the different incentive effects provided. We also derive the formal identifying assumptions needed to estimate consistently the average treatment effects on enrollment and performance at school. We find empirically that this program had always a positive impact on school continuation whereas for performance it had a positive impact at primary school but a negative one at secondary school (a possible consequence of disincentives due to the program termination after the third year of secondary school).