The Effect of Cash Transfer Programs on Educational Mobility - An Agent Based Approach

Abstract

In this paper I develop a model to reproduce the phenomenon of high intergenerational correlations in education particularly observed in Latin American Countries. The model is based on empirical evidence and implemented through agent based modeling techniques. The effect of conditional cash transfer programs on educational mobility is then analyzed. The results suggest that conditional cash transfer program can substantially increase intergenerational mobility in education. I find that using parental education as eligibility criterion and adapting the subsidies to the income level can improve the efficiency of a program in increasing educational mobility as compared to a purely income based program.

Keywords: educational mobility, conditional cash transfer program, agent based modeling, inequality, schooling decision

JEL Classification: C63, D63, H52, I24, I3, J62