Susan W. Parker

Do Conditional Cash Transfers for Schooling Generate Lasting Benefits? A Five-Year Followup of PROGRESA/Oportunidades

Conditional cash transfer (CCT) programs link public transfers to human capital investment in hopes of alleviating current poverty and reducing its intergenerational transmission. However, little is known about their long-term impacts. This paper evaluates longer-run impacts on schooling and work of the best-known CCT program, Mexicos PROGRESA/Oportunidades, using experimental and nonexperimental estimators based on groups with different program exposure. The results show positive impacts on schooling, reductions in work for younger youth (consistent with postponing labor force entry), increases in work for older girls, and shifts from agricultural to nonagricultural employment. The evidence suggests schooling effects are robust with time.

EVALUATING CONDITIONAL SCHOOLING AND HEALTH PROGRAMS

We analyze in this chapter the development and evaluation of a new genre of social programs termed conditional cash transfer programs which have become widespread across Latin America and are now extending outside the region. Conditional transfer programs typically link monetary transfers to human capital investment, generally education, health or a combination of both. These transfer programs are considered innovative because they condition the receipt of monetary benefits on such behaviors as regular school attendance and preventive clinic visits. Effectively they are a subsidy to schooling and health, reducing the shadow price of human capital acquisition. We focus here primarily on a case study of Progresa (the Education, Health and Nutrition Program), a Mexican anti-poverty program which has served as a model for the implementation of conditional programs in other countries, and on which most evidence exists on impacts. We also review results from the newer conditional cash transfer programs. The chapter thus analyzes what we know about the success of conditional cash transfer programs as a mechanism for reducing poverty and identifies what research which is still needed in order for broader conclusions to be drawn.

Household income and health care expenditures in Mexico

The purpose of this paper is to examine the determinants of household health expenditures in Mexico. Our analysis involves the estimation of household monetary health care expenditures, using the economic and demographic characteristics of the household as covariates. We pay particular attention to the impact of household income on health expenditures, estimating the elasticity of health care expenditures with respect to income for different income groups and according to health insurance status. For the empirical analysis, we use the Mexican National Survey of Income and Expenditures of 1989. Our principle findings show that monetary health expenditures by Mexican households are sensitive to changes in household income levels and that the group which is most responsive to changes in income levels in the lower-income uninsured group. This suggests that in times of economic crisis, these households reduce cash expenditures on health care by proportionately more than higher-income and insured households.

Schooling Impacts of Conditional Cash Transfers on Young Children: Evidence from Mexico

This article evaluates impacts of Oportunidades, a Mexican conditional cash transfer program, on educational outcomes 5.5 years after program initiation for a group of children who were ages 0–8 years preprogram. The oldest children within this age range received educational scholarships. The youngest children did not receive the scholarships because they had not yet started the third grade (the initial grade for scholarships) but were beneficiaries of the program’s health components, which included nutritional supplements for children 24 months of age or younger. All of these children also may have benefited more generally from increased household income resulting from the program. This article investigates how the program differentially affected younger and older children within this age range and examines whether the early nutritional intervention led to improvements in subsequent educational performance. The program impact estimates are derived from a randomly assigned treatment and control group, which participated for different lengths of time in the program, and from a matched comparison group that had not participated prior to the collection of data in 2003. The empirical findings show positive program impacts on reducing ages at entering school for the younger children as well as on accumulated grades of schooling after 5.5 years of benefits for older children, with estimates implying a 1% reduction in the age of entry to primary and an increase in grades of schooling completed to date of about 8%–9%.

Aligning Learning Incentives of Students and Teachers: Results from a Social Experiment in Mexican High Schools

This paper evaluates the impact of three different performance incentive schemes using data from a social experiment that randomized 88 Mexican high schools with over 40,000 students into three treatment groups and a control group. Treatment 1 provides individual incentives for performance on curriculum-based mathematics tests to students only, treatment 2 to teachers only, and treatment 3 gives both individual and group incentives to students, teachers, and school administrators. Program impact estimates reveal the largest average effects for treatment 3, smaller impacts for treatment 1, and no impact for treatment 2.

Deception and Misreporting in a Social Program

We investigate empirically the extent of misreporting in a poverty-alleviation program in which self-reported information, followed by a household visit, is used to determine eligibility. Underreporting may be due to a deception motive, and overreporting to an embarrassment motive. We find that underreporting of goods and desirable home characteristics is widespread, and that overreporting is common with respect to goods linked to social status. Larger program benefits encourage underreporting and discourage overreporting. The effect of benefits on underreporting is significant under a variety of specifications. We also investigate the effects of education and gender on misreporting.

Randomization and Social Program Evaluation: The Case of Progresa

In this article, the authors analyze the development of Progresa, a Mexican antipoverty program that conditions monetary transfers to human capital investment of its beneficiary families. The program is the principal antipoverty strategy of the Mexican government and has served as a model for similar programs in a number of countries in Latin America. Progresa is also noteworthy because it was subject to a rigorous evaluation effort in rural areas, which included an experimental design. The authors first describe the rationale behind the design of Progresa, in particular, the conditioning of monetary transfers to childrens school attendance and regular health clinic visits. The authors then turn to the evaluation effort, analyzing the randomized trial, the evaluation results, and the effect of the evaluation on the evolution of the program. Finally, the authors consider the limitations of the evaluation as well as areas where more research is needed.

The added worker effect over the business cycle: evidence from urban Mexico

This paper investigates whether the added worker effect is an important determinant of the increased labour force participation by women and whether the magnitude of the added worker effect differs between the peak and trough of the business cycle. Use is made of repeated observations from spouses in urban Mexico, collected during the Peso crisis (1994:4–1995:4) and during the period of economic prosperity (1998:4–1999:4). Significant added worker effects are found in both periods. The magnitude of the added worker effect during the crisis period is found to be twice as large as that observed during the period of economic prosperity.

Are conditional cash transfers effective in urban areas? Evidence from Mexico

Conditional cash transfer (CCT) programs have spread worldwide as a new form of social assistance for the poor. Previous evaluations of CCT programs focus mainly on rural settings, and little is known about their effects in urban areas. This paper studies the short-term (1- and 2-year) effects of the Mexican Oportunidades CCT program on urban children/youth. The program provides financial incentives for children/youth to attend school and for family members to visit health clinics. To participate, families had to sign up for the program and be deemed eligible. Difference-in-difference propensity score-matching estimates indicate that the program is successful in increasing school enrollment, schooling attainment and time devoted to homework for girls and boys and in decreasing working rates of boys.

Schooling Inequality and Language Barriers

This article estimates the impact of language barriers on school achievement and the potential ameliorating role of bilingual education. Using large household data sets from poor rural communities in Mexico, we find that parental language (failure to speak Spanish) represents an important barrier to the schooling of indigenous children. We provide an empirical test suggesting that this largely reflects parental human capital related to culture/language, rather than unobserved wealth effects. Using double difference estimators with community fixed effects to address endogenous program placement, we demonstrate that schools with bilingual education narrow the gap in the educational performance of children with monolingual mothers versus bilingual and nonindigenous mothers.