Progressing through PROGRESA: An Impact Assessment of a School Subsidy Experiment in Rural Mexico

TLDR

PROGRESA is a Mexican antipoverty program that provides cash transfers to families contingent on children’s school attendance, with benefit levels varying by grade and gender to offset opportunity costs, and its effects extend beyond enrollment to dropout, repetition, and reentry patterns. The study applies a Markov schooling transition model to experimental data to evaluate PROGRESA’s impact on schooling attainment and related behaviors such as matriculation age, dropout, repetition, and reentry. The initial phase of PROGRESA was a randomized social experiment, and the authors used a Markov transition model to analyze the data. Results show that PROGRESA increases schooling attainment by reducing dropout rates and facilitating grade progression, especially during the primary‑to‑secondary transition; a simulation indicates that participation from ages 6 to 14 would raise average attainment by 0.7 years and increase junior secondary enrollment by 21 %, with larger effects for boys.

Abstract

A new antipoverty program in Mexico, PROGRESA, provides monetary transfers to families that are contingent upon their children's regular attendance at school. The benefit levels vary with the grade level and gender of the child and are intended to offset the opportunity costs of not sending children to school. The initial phase of the program was implemented as a randomized social experiment. This article uses a Markov schooling transition model applied to the experimental data to assess the impact of the subsidy program on schooling attainment and on the underlying behaviors that determine schooling attainment, including ages of matriculation, dropout rates, grade repetition rates, and school reentry rates. Results show that the program increases schooling attainment effectively by reducing dropout rates and facilitating grade progression, particularly during the transition from primary to secondary school. Many of these effects would not be clear if attention were limited to enrollments as in much of the previous literature. A simulation evaluating the effects of longer terms of exposure to the program indicates that, if children were to participate between ages 6 to 14, there would be an increase of 0.7 years in average educational attainment levels and an increase of 21% in the proportion of children attending junior secondary school, with somewhat larger effects for boys than for girls.