Are Conditional Cash Transfers Effective in Urban Areas? Evidence from Mexico

Abstract

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 (one and two-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 and in decreasing working rates of boys.

Keywords: conditional cash transfer programs, matching estimators, program evaluation

JEL Classification: I21, I28, J24