DoConditionalCashTransfersforSchoolingGenerateLastingBenefits?AFive-YearFollowup ofPROGRESA/OportunidadesTheJournalofHumanResources

JERER. BEHRMAN

SUSANW.PARKER

PETRAE. TODD

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Motivation

- Conditionalcashtransfer(CCT)programslinkpublictransferstohumancapitalinvestmentinhopesofalleviatingcurrentpovertyandreducingitsintergenerationaltransmission.

- PROGRESA/Oportunidades beganoperatinginsmallruralcommunitiesin1997.

- Itexpandedtourbanareasandnowcoversfivemillionfamilies,oraboutonequarterofallfamiliesinMexico.

- Wellover30countriesnowhaveaspartoftheirsocialpolicyCCTprograms,mostofwhichincludesubstantialschoolingconditionalities.

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Motivation

- Littleisknownaboutthelonger-termimpactsofCCTsonschoolingattainmentorotheroutcomes,despitetherapidspreadoftheseprograms.

- Evaluationsarelimitedforthemostparttoassessingtheimpactofafairlyshortexposuretoanewprogram(thatis,forayearortwo)onoutcomesovershortperiods.

- Animportantpolicyissueiswhetherprogramimpactschangeovertime.

- Highersubsidymayberequiredtoinducegirlstoobtainasmuchschoolingasboys.

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Motivation

- Whiletheincomeeffecttendstoincreasethetimespentinleisure,theneteffectsontimespentatschoolandworkingwouldberespectivelypositiveandnegativeifthesubstitutioneffectdominates.

- Assumingdiminishingmarginalreturnstoschooling,leadustoexpectthatovertheshortrun,theprogramislikelytodecreaseworkingbutoverthelongerrun,theprogrammightincreaseworking.

- Iftheprogramencourageschildrenwithlowerscholarlyabilitytostayinschool,wemightobserveanincreaseinschool-goingalongwithadecreaseintheratesofgradeprogressionforsuchchildren.

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MainQuestionandHowtoAnswerIt

- DoEffectsChangeOverTime?1.ImpactonSchooling2.ImpactonWorking3.ProbabilityofWorkinginAgriculture

- Thispaperevaluateslonger-runimpactsonschoolingandworkofthebest-knownCCTprogram,Mexico’sPROGRESA/Oportunidades

- Investigatetwotypesoflonger-runimpactsforthewell-knownandinfluentialMexicanPROGRESA/Oportunidades CCTprogram.

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MainQuestionandHowtoAnswerIt

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MainQuestionandHowtoAnswerIt

QuadrantB:

- Experimentalimpactsbasedonaninitialshort(18-month)differentialinexposureusingdifference-in-difference(DID)

- Estimatesthatpermitassessingwhetherinitialprogramimpactsfromshortexposuredifferentialsarerobustorfadeovertime

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MainQuestionandHowtoAnswerIt

QuadrantC:

- Difference- in-differencematching(DIDM)impactsbasedonalongerdifferentialinexposurethatprovideinsightintolonger-runprogramimpactsoflongerdifferentialinexposure

- IncomparisonwiththeestimatesofType1,intowhetherthereareincreasingordiminishingreturnstothedurationofprogramexposure.

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MainQuestionandHowtoAnswerIt

- 320communitiestoatreatmentgroupand186toacontrolgroup

- In2000,approximatelyoneandahalfyearsafterthestartoftheexperiment,thecontrolgroupcommunitiesalsobegantoreceivebenefits.

- In2003,analyzeimpactsonschoolingattainmentandlaborforceparticipationofyouthfiveandahalfyearsaftertheexperimentaltreatmentgroupfirstbeganreceivingbenefits.

- 2003:Newgroupofhouseholdsin152communitiesthathadneverreceivedbenefitsofOportunidades

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MainQuestionandHowtoAnswerIt

- Analysisfocusesonyouthwhowere9–15-years-oldin1997andwhowere15–21-years-oldin2003.

- In1997,whentheprogrambegan,thisgroupwasatorneartheageofthetransitionfromprimarytosecondaryschoolandin2003,manyoftheseyouthhadenteredthelabormarket.

- AcriticaljunctureinruralMexicoatwhichmanychildrendropoutofschool.

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Results

- Theresultsshowpositiveimpactsonschooling,reductionsinworkforyoungeryouth(consistentwithpostponinglaborforceentry),increasesinworkforoldergirls,andshiftsfromagriculturaltononagriculturalemployment.Theevidencesuggestsschoolingeffectsarerobustwithtime.

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PROGRESA/Oportunidades ImpactsonSchoolingandWorkafterFiveandaHalfYearsofanInitial18-MonthDifferentialProgramExposure

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Longer-runimpactofshortdifferentialexposure

- Evaluatewhethertheshortdifferentialexposuretotreatmentbetweenthetwogroupshadlonger-runimpactsonschoolingandwork.

- Estimateimpactsofdifferentialexposurefromalinearregressionofthedifferenceintheoutcomevariablebeforeandaftertheprogram

Controls:-parentalage,parentalschoolingattainment,indigenousstatus,andhouseholdcharacteristicsincludingnumberofrooms,electricity,typeoffloor,andwater/sewagesystem

- Toaccountforpossibleattritionbiases,weemployaweightingmethodthatisequivalenttoamatchingonobservablesapproach.

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Longer-runimpactofshortdifferentialexposure

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Longer-runimpactofshortdifferentialexposure

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Longer-runimpactofshortdifferentialexposure

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Longer-runimpactofshortdifferentialexposure

ImpactsonSchooling

- Youthwith18monthsgreaterexposuretotheprogramaccumulatedsignificantlymoreschoolingandthisdifferentialpersistedforthelonger-termfiveandahalfyearperiod

- Thelargesteffectsareobservedforthosewhohadcompletedfivegradesofschoolingby1997

- AnFtestrejectsequalityofcoefficientsatconventionalsignificancelevelsforeachsetofsubgroupsforbothmalesandfemales,suggestingdifferentimpactsofPROGRESA/Oportunidades onschoolingbyageandpreprogramschoolinggradescompleted.

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Longer-runimpactofshortdifferentialexposure

ImpactsonWorking

- ThetheoreticaleffectofPROGRESA/Oportunidades ontheprobabilityofworkingisambiguous.Overtheshortrun,theprogramdecreasesworking,butoverthelongerrun,theprogrammightincreaseworking.

- TheDIDestimateoftheimpactoftheoneandahalfyeardifferentialexposuretotheprogramonworkingfiveandahalfyearslatershowsthatgreaterexposuresignificantlydecreasestheproportionworkingby4.1percentforboyswithnosignificanteffectsforgirls.

- Effectsdonotsignificantlydifferbyagegroupsorbypreprogramschoolinglevel.

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Longer-runimpactofshortdifferentialexposure

DoEffectsChangeOverTime?

- Impactestimatesfortheyear2000arebasedoncomparingthetreatmentgroupwhichhadtwoandahalfyearsversusthecontrolgroupatnearlyayearofbenefits.Thatis,wetestwhetherimpactestimatesbasedon2000followup dataaredifferentfromthosebasedonthe2003datausedinthispaper

- Estimatesshowsignificantlyhigherestimatedimpactsfor2003than2000,thelargemajorityofthe18reportedestimatesdonotrejectthenullhypothesisofequality.TheresultssuggestthatPROGRESA/Oportunidades impactsonschoolingdonotdiminishovertime.

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Longer-runimpactofshortdifferentialexposure

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Longer-RunPROGRESA/OportunidadesImpactsafterFiveandaHalfYearsofDifferentialExposure

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Longer-runimpactoflongerdifferentialexposure

- Wecomparetheoriginaltreatmentgroups(T1998andT2000)withthenewcomparisongroup(C2003)thatwasdrawnfromruralareasthathadnotyetbeenincorporatedintotheprogramin2003.

- BecausetheC2003groupwasnotselectedrandomly,weusematchingmethodstotakeintoaccountdifferencesinobservedcharacteristicsbetweentheT2000andC2003samplesandbetweentheT1998andC2003samples.

- DIDMisanalogoustothestandardDIDregressionestimator,butdoesnotimposefunctionalformrestrictionsinestimatingthecondi- tional expectationoftheoutcomevariableandreweightstheobservationsaccordingtotheweightingfunctionsimpliedbythematchingestimators.

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Longer-runimpactoflongerdifferentialexposure

ImpactonSchooling

- Thefindingsconfirmsignificantlylargerimpactsonschoolingwithalongertimeofexposuretotheprogramthanforthosewithshortertimeofexposure.

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Longer-runimpactoflongerdifferentialexposure

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Longer-runimpactoflongerdifferentialexposure

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Girls:

Longer-runimpactoflongerdifferentialexposure

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Boys:

Longer-runimpactoflongerdifferentialexposure

ImpactonWorking

- Foryoungerboys—thatis,thoseaged9–10prepro- gramin1997—showanegativeandsignificantimpactontheprobabilityofem- ployment,consistentwithmanyboysstillattendingschoolatthisage(15–16in2003).

- Fortheolderagegroups,thereisnosignificantimpactoftheprogramonworking,whichmaymasknegativeimpactsfromsomeboyscontinuingtostudyandpositiveimpactsfromthosehavingcompletedtheirstudiesandenteringtheworkforce.

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Longer-runimpactoflongerdifferentialexposure

ProbabilityofWorkinginAgriculture

- Girlshavemuchlowerparticipationinagriculturalworkthanboys.

- Foroldergirls,forwhomtherewasasignificantincreaseintheprobabilityofworking,thereisnosignificantincreaseintheprobabilityofparticipatinginagriculturalwork,suggestiveofincreasingnonagriculturalwork.

-Thereductionsinagriculturalworkforboysaged9–10preprogramaresimilartothepercentagereductionsinwork,implyingsimilarreductionsinagriculturalasnonagriculturalwork.

- Forolderboys,onwhichtherewerenooverallsignificantprogrameffectsonworking,therearesignificantreductionsinagriculturalwork

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Longer-runimpactoflongerdifferentialexposure

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Benefit-CostEstimates

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Benefit-CostEstimates

- Hereweassumethebenefitsfromtheprogramarisefromincreasesinfutureearningsonlyasaresultoftheincreaseinschoolingattainmentfromtheprogram.

- Estimatethereturntoschoolingcontrollingforpotentialendogeneity

- Focusingonthesampleofmen,asimpleOLSestimateofreturnstoschoolingattainmentgivesavalueof7.5percentperyearforthisagegroup(16–24),theIVestimateofwagefunctionsincreasesthevaluetoabout10percent

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Benefit-CostEstimates

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SpecialThanksforYourAttendance

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