Conditional Cash Transfers and Their Impact on Child Work and Schooling: Evidence from the PROGRESA Program in Mexico

Abstract

In lieu of an abstract, here is a brief excerpt of the content: Conditional Cash Transfers and Their Impact on Child Work and Schooling: Evidence from the PROGRESA Program in Mexico Over the past few years, a number of Latin American countries haveintroduced antipoverty programs specifically focused toward increas-ing investment in human capital, as measured, in particular, by education, but also by health and nutrition. These programs represent a significant departure from previous antipoverty policies within the region, for they are based on the premise that one of the fundamental causes of poverty and its intergenerational transmission is the lack of investment in human development. A distinguishing characteristic of the programs is the provision of cash transfers on the condition that poor families take their children out of work and send them to school. One of the first programs of this kind to be implemented was Mexico’s Programa de Educación, Salud y Alimentación (the Education, Health, and Nutrition Program), known by its Spanish acronym, PROGRESA. Introduced in 1997, the program, which provides cash transfers, is aimed at increasing families’ investment in human capital as defined by education, health, and nutrition. To achieve this objective, PROGRESA conditions cash transfers on children’s enrollment and regular attendance in school, as well as clinic attendance. These transfers correspond, on average, to a 22 percent increase in the income levels of the beneficiary families and are given directly to the mother of the family. The program also includes inkind health benefits and nutritional supplements for children up to age five 45 EMMANUEL SKOUFIAS SUSAN W. PARKER Skoufias is with the International Food Policy Research Institute. Parker is with the Economics Division of the Centro de Investigación y Docencia Económicas (CIDE). The authors are grateful to Jere Behrman, Nora Lustig, and Carola Pessino for valuable comments on an earlier draft of the paper. 0263-03/Skoufias 10/3/01 12:39 Page 45 and for pregnant and lactating women. PROGRESA has grown rapidly. It now covers 2.6 million families in extreme poverty in rural areas, or about 40 percent of all rural families in Mexico. In this paper we conduct a detailed analysis of the extent to which PROGRESA has an impact on schooling, work, and time allocation among boys and girls between eight and seventeen years of age.1 We address several questions. Does the program reduce child labor? Does it increase participation in school activities? Does the latter occur at the expense of children’s leisure time? How do the effects of the program vary by age group and gender? Our empirical analysis relies on data from a quasiexperimental design used to evaluate the program’s impact. The data cover a sample of communities that receive PROGRESA benefits (treatment) and comparable communities that receive benefits at a later time (control). Our analysis is conducted in two parts, incorporating a progressively broader definition of work. In the first part we examine data from various survey instruments used in the evaluation of PROGRESA and applied to both treatment and control groups before and after program implementation. In this way we are able to estimate the program’s impact using the double difference estimator that is commonly acknowledged as a preferred estimator for program evaluation. In the second part we take advantage of a module on time use, carried out about a year after program implementation. This module allows us to consider a broader definition of work that includes time allocated during the previous day to domestic and farm activities. This also allows us to examine the impact of PROGRESA on leisure. Empirical studies based on data from other countries find that an unconditional income change has a surprisingly small marginal effect on both school enrollment and child labor.2 This suggests that unconditional cash 46 ECONOMIA, Fall 2001 1. This study is only one of a number of studies conducted as part of the PROGRESA evaluation project carried out by the International Food Policy Research Institute (IFPRI) under the direction of Emmanuel Skoufias. The studies that are directly...