Conditional Cash Transfers and Labor Market Conditions

52 Pages Posted: 28 Aug 2021

See all articles by Teresa Molina

Teresa Molina

University of Hawaii at Manoa

Joaquim Vidiella-Martin

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Abstract

Do local labor markets influence the effectiveness of educational policies? To answer this question, we focus on Mexico's conditional cash transfer program, PROGRESA, documented to have increased educational attainment. We show that PROGRESA's impact on schooling was smaller in areas with more export-oriented manufacturing jobs and argue this is because these jobs generate more convex opportunity costs of schooling. Consistent with this, the heterogeneity we document is strongest among those old enough to be working in factory jobs. In addition, this heterogeneity is primarily driven by jobs that directly influence schooling opportunity costs: low-wage jobs and jobs for school-aged workers.

JEL Classification: I28, F16, I38, O14

Suggested Citation

Molina, Teresa and Vidiella-Martin, Joaquim, Conditional Cash Transfers and Labor Market Conditions. IZA Discussion Paper No. 14667, Available at SSRN: https://ssrn.com/abstract=3913028 or http://dx.doi.org/10.2139/ssrn.3913028

Teresa Molina (Contact Author)

University of Hawaii at Manoa ( email )

2500 Campus Road
Honolulu, HI NA 96822
United States

Joaquim Vidiella-Martin

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

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