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Long-Term Impacts of the Oportunidades Conditional Cash Transfer Program on Rural Youth in Mexico

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Long-Term Impacts of the Oportunidades Conditional Cash Transfer Program on Rural Youth in Mexico A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Behrman, Jere R.; Parker, Susan W.; Todd, Petra E. Working Paper Long-term impacts of the oportunidades conditional cash transfer program on rural youth in Mexico IAI Discussion Papers, No. 122 Provided in Cooperation with: Ibero-America Institute for Economic Research, University of Goettingen Suggested Citation: Behrman, Jere R.; Parker, Susan W.; Todd, Petra E. (2005) : Long-term impacts of the oportunidades conditional cash transfer program on rural youth in Mexico, IAI Discussion Papers, No. 122, Georg-August-Universität Göttingen, Ibero-America Institute for Economic Research (IAI), Göttingen This Version is available at: http://hdl.handle.net/10419/27412 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Ibero-Amerika Institut für Wirtschaftsforschung Instituto Ibero-Americano de Investigaciones Económicas Ibero-America Institute for Economic Research (IAI) Georg-August-Universität Göttingen (founded in 1737) Diskussionsbeiträge · Documentos de Trabajo · Discussion Papers Nr. 122 Long-Term Impacts of the Oportunidades Conditional Cash Transfer Program on Rural Youth in Mexico Jere R. Behrman, Susan W. Parker, Petra E. Todd October 2005 Platz der Göttinger Sieben 3 ⋅ 37073 Goettingen ⋅ Germany ⋅ Phone: +49-(0)551-398172 ⋅ Fax: +49-(0)551-398173 e-mail: [email protected] ⋅ http://www.iai.wiwi.uni-goettingen.de Long-Term Impacts of the Oportunidades Conditional Cash Transfer Program on Rural Youth in Mexico∗ Jere R. Behrman, Susan W. Parker and Petra E. Todd Abstract by providing incentives for private investment in schooling and health.1 The Oportunidades program, This paper studies the long-term effects of partici- formally called PROGRESA, has operated in rural pation in the Mexican Oportunidades program on a areas of Mexico since 1997, giving cash grants to poor variety of outcomes and behaviors of rural youth in families in exchange for their children’s regular atten- Mexico. It analyzes data from a social experiment, dance at school and for visits to health clinics. Cur- which randomly phased-in the program in rural Mex- rently, five million families participate in the program, ican villages. In 1997, 320 villages (the treatment which represents about one-fourth of all families in group) were randomly selected for early incorpora- Mexico. tion into the program and 186 villages (the control For evaluation purposes, the Oportunidades pro- group) were designated as a control group to be in- gram was initially implemented as a randomized so- corporated eighteen months later. This paper ex- cial experiment, with 320 rural villages assigned to amines whether differential exposure to the program the treatment group and 186 assigned to the con- significantly impacted educational attainment, labor trol group. Eligible households in treatment villages market outcomes, marriage, migration and cognitive began receiving benefits in the spring of 1998. The achievement of youth. The results show positive im- program was withheld from households in the con- pacts of longer exposure on grades of schooling at- trol villages for 18 months, after which they were tained, but no effects on achievement tests. With also incorporated.2 A rigorous external evaluation, respect to work, we find an overall reduction in work with several rounds of panel data and an experimen- for male youth. tal design, as well as other approaches to analysis such as regression discontinuity design and structural modeling, was implemented at the beginning of the 1Introduction program (covering the 1998-2000 period). The early evaluation results demonstrated significant impacts Governments throughout Latin America and South in reducing child labor, improving health outcomes, America have adopted conditional cash transfer pro- and increasing school enrollment, among other short- grams aimed at alleviating short-term poverty and re- term effects.3 Some of the initial evaluation studies ducing the intergenerational transmission of poverty also generated estimates of longer-run effects, under assumptions such as stability in schooling transition ∗The authors wrote this paper as consultants to the Insti- tuto Nacional de Salud Publica (INSP) 2004 ongoing evalua- matrices or in the structural relations underlying fam- tion of Oportunidades under a subcontract to Parker (PI) on ily behaviors.4 “Impacto a mediano plazo de Oportunidades en educación en áreas rurales,” with additional support from the Mellon Foun- dation/Population Studies Center (PSC)/University of Penn- 1 Such programs exist in Brazil, Chile, Colombia, sylvania grant to Todd (P.I.) on “Long-term Impact Evalua- Guatemala, and Nicaragua. tion of the Oportunidades Program in Rural Mexico.” Parker 2 According to program administrators, control households is a Profesora/Investigadora, División de Economía, CIDE, were not informed ahead of time about the plans for their in- Behrman is the Director of the PSC and W.R. Kenan Jr. corporation. Professor of Economics, Economics Department, University of 3 The overall evaluation of the initial years of PROGRESA is Pennsylvania, Todd is Associate Professor of Economics and summarized in Behrman and Skoufias (2004), Skoufias (2001), a PSC Research Associate, Economics Department, University Skoufias and McClafferty (2001), Parker (2003) of Pennsylvania. The authors thank Bernardo Hernández and 4 See, e.g., Schultz (2002), Behrman, Sengupta and Todd Iliana Yaschine for useful comments. (2005), and Todd and Wolpin (2004). 1 With the availability of the 2003 follow-up rural school quality. evaluation survey (ENCEL2003), it is now possible As noted, the treatment and control villages were to assess directly some important longer-run effects originally chosen by a randomized experimental de- of the program. Moreover, in 2003 achievement tests sign. Over time, however, attrition, mainly due were applied, making it possible for the first time to migration, led to some observable differences be- to evaluate whether the program significantly influ- tween the groups. The empirical strategy adopted enced the cognitive achievement of participating chil- in this paper is to assess program impacts using dren/youth. This paper examines the impacts of adifference-in-difference approach combined with a Oportunidades on a variety of behaviors and out- density reweighting method (described in section 3 comesofruralyouthin2003,morethanfive years af- below) to take into account attrition occurring be- ter households in the original treatment group began tween the baseline and follow-up surveys. The prob- receiving benefits. Specifically, we examine whether lem of attrition is mitigated somewhat by the fact differential exposure to the program as experienced that the follow-up survey asks parents questions by the treatment and control households significantly about any children who migrated away from the impacted educational attainment, labor market out- household. Thus, data are available for many out- comes, marriage, fertility, migration and cognitive comes of interest even if children migrated. Entire achievement. We also explore how schooling impacts households that left the experimental villages were vary with the type of school available, as captured by not followed, but migrants within villages were fol- select school quality characteristics. lowed. Our analysis sample consists of youth who were Our impact estimates reveal significant positive im- aged9to15in1997justpriortotheprograminter- pacts of long-term (5.5 years) exposure to the pro- vention (aged 15 to 21 in 2003). We focus on this gram on school grades completed. On average, youth group as they encompass those who, prior to the in- in the treatment group have about 0.2 more years tervention, were at or close to the transition between of schooling than youth in the control group, both primary and secondary school—a critical juncture in for boys and girls. Larger effects on the order of 0.5 schooling attainment in poor communities in rural years are observed for the subset of youth who were Mexico. Figure 1.1 illustrates how schooling atten- near the transition between primary and secondary dance and labor market participation vary with age. school at the time the program was introduced. Our Part of the reason for the sharp drop-off in school at- estimates also suggest that boys with longer exposure tendance during the transition to secondary school is progressed significantly faster through school.
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