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

Dubois, Pierre, Alain de Janvry, and Elisabeth Sadoulet. “Effects on School Enrollment and Performance of a Conditional Cash Transfers Program in Mexico.” Journal of Labor Economics, 30(3): 555-90.

Abstract

We study the e ects of the Mexican conditional cash transfer program Progresa (now re-named Oportunidades) on school enrollment and performance in passing grades. We develop a theoretical framework of the dynamics of the educational process including endogeneity and uncertainty of school performance. It provides predictions for the e ect on performance of a cash transfer conditional on school attendance. Using a randomized experiment implemented under Progresa, we identify the e ect of the program on enrollment and performance in the fi rst year of the program, before performance-induced dynamic selection took place. We fi nd that the program had a positive impact on school enrollment at all grade levels whereas for performance it had a positive impact at the primary school level but a negative impact at the secondary level. According to our theoretical framework, this can be due to the disincentives created by termination of program bene ts after the third year of secondary school.

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