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Social Interactions and Schooling Decisions

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  • Rafael Lalive

    (University of Lausanne, IEW, CESifo, IZA, and IFAU)

  • M. Alejandra Cattaneo

    (Swiss Coordination Center for Research in Education)

Abstract

The aim of this paper is to study whether a child's schooling choices are affected by the schooling choices of other children. Identification is based on a randomized targeted intervention that grants a cash subsidy conditional on school attendance to a subgroup of eligible children within small rural villages in Mexico (PROGRESA). This policy change spills over to ineligible children if social interactions are relevant. Results indicate that the eligible children tend to attend school more frequently, and the ineligible children acquire more schooling when the subsidy is introduced in their local village. Moreover, the overall effect of PROGRESA on eligible children is the sum of a direct effect due to cash transfers and an indirect effect due to changes in peer group schooling. Interestingly, the social interactions effect is almost as important as the direct effect. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 91 (2009)
Issue (Month): 3 (August)
Pages: 457-477

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Handle: RePEc:tpr:restat:v:91:y:2009:i:3:p:457-477

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  1. Michael Kremer & Edward Miguel & Rebecca Thornton, 2004. "Incentives to Learn," NBER Working Papers 10971, National Bureau of Economic Research, Inc.
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  13. repec:att:wimass:9217 is not listed on IDEAS
  14. George A. Akerlof & Rachel E. Kranton, 2002. "Identity and Schooling: Some Lessons for the Economics of Education," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 40(4), pages 1167-1201, December.
  15. Buddelmeyer, Hielke & Skoufias, Emmanuel, 2003. "An Evaluation of the Performance of Regression Discontinuity Design on PROGRESA," IZA Discussion Papers 827, Institute for the Study of Labor (IZA).
  16. Jacob M. Markman & Eric A. Hanushek & John F. Kain & Steven G. Rivkin, 2003. "Does peer ability affect student achievement?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 18(5), pages 527-544.
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  18. Behrman, Jere R & Sengupta, Piyali & Todd, Petra, 2005. "Progressing through PROGRESA: An Impact Assessment of a School Subsidy Experiment in Rural Mexico," Economic Development and Cultural Change, University of Chicago Press, University of Chicago Press, vol. 54(1), pages 237-75, October.
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