IDEAS home Printed from
   My bibliography  Save this article

Cost-effectiveness Analysis of Demand- and Supply-side Education Interventions: the Case of PROGRESA in Mexico


  • David P. Coady
  • Susan W. Parker


The paper is concerned with the issue of the most cost-effective way of improving access to education for poor households in developing countries. The authors consider two alternatives: extensive expansion of the school system (i.e., bringing education to the poor), and subsidizing investment in education by the poor (i.e., bringing the poor to the education system). To this end, the authors evaluate PROGRESA, a large poverty-alleviation program recently introduced in Mexico, which subsidizes education. Using double-difference regression estimators on data collected before and after the program for randomly selected "control" and "treatment" households, the relative impacts of the demand- and supply-side program components are estimated. Combining these estimates with cost information, it is found that the demand-side subsidies are substantially more cost-effective than supply-side expansions. Copyright Blackwell Publishing Ltd 2004.

Suggested Citation

  • David P. Coady & Susan W. Parker, 2004. "Cost-effectiveness Analysis of Demand- and Supply-side Education Interventions: the Case of PROGRESA in Mexico," Review of Development Economics, Wiley Blackwell, vol. 8(3), pages 440-451, August.
  • Handle: RePEc:bla:rdevec:v:8:y:2004:i:3:p:440-451

    Download full text from publisher

    File URL:
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Dinopoulos, Elias & Thompson, Peter, 2000. "Endogenous growth in a cross-section of countries," Journal of International Economics, Elsevier, vol. 51(2), pages 335-362, August.
    2. Keller, Wolfgang, 2002. "Trade and the Transmission of Technology," Journal of Economic Growth, Springer, vol. 7(1), pages 5-24, March.
    3. Miles S. Kimball & John G. Fernald & Susanto Basu, 2006. "Are Technology Improvements Contractionary?," American Economic Review, American Economic Association, vol. 96(5), pages 1418-1448, December.
    4. Rachel Griffith & Stephen Redding & John Van Reenen, 2004. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 883-895, November.
    5. Griliches, Zvi, 1980. "R & D and the Productivity Slowdown," American Economic Review, American Economic Association, vol. 70(2), pages 343-348, May.
    6. Bayoumi, Tamim & Coe, David T. & Helpman, Elhanan, 1999. "R&D spillovers and global growth," Journal of International Economics, Elsevier, vol. 47(2), pages 399-428, April.
    7. Charles I. Jones, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 495-525.
    8. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    9. Zvi Griliches, 1998. "Returns to Research and Development Expenditures in the Private Sector," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 49-81 National Bureau of Economic Research, Inc.
    10. Imbs, Jean M., 1999. "Technology, growth and the business cycle," Journal of Monetary Economics, Elsevier, vol. 44(1), pages 65-80, August.
    11. Evans, Paul, 1996. "Using cross-country variances to evaluate growth theories," Journal of Economic Dynamics and Control, Elsevier, vol. 20(6-7), pages 1027-1049.
    12. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 33(1), pages 125-132.
    13. Peter Howitt, 1999. "Steady Endogenous Growth with Population and R & D Inputs Growing," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 715-730, August.
    14. Kocherlakota, Narayana R & Yi, Kei-Mu, 1997. "Is There Endogenous Long-Run Growth? Evidence from the United States and the United Kingdom," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(2), pages 235-262, May.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Ludger Wossmann, 2010. "Families, schools and primary-school learning: evidence for Argentina and Colombia in an international perspective," Applied Economics, Taylor & Francis Journals, vol. 42(21), pages 2645-2665.
    2. John A. Maluccio & Alexis Murphy & Ferdinando Regalia, 2009. "Does Supply Matter? Initial Supply Conditions and the Effectiveness of Conditional Cash Transfers for Grade Progression in Nicaragua," Middlebury College Working Paper Series 0908, Middlebury College, Department of Economics.
    3. Jann Lay, 2010. "MDG Achievements, Determinants, and Resource Needs: What Has Been Learnt?," GIGA Working Paper Series 137, GIGA German Institute of Global and Area Studies.
    4. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications, The World Bank, number 2597.
    5. Del Rey, Elena & Estevan, Fernanda, 2013. "Conditional cash transfers and education quality in the presence of credit constraints," Economics of Education Review, Elsevier, vol. 34(C), pages 76-84.
    6. Marcos E. Domínguez Viera, 2011. "Does the Impact of Oportunidades Program Increases in Highly Competitive Regions?," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(2), pages 79-111, November.
    7. Lentz, Erin C. & Barrett, Christopher B., 2013. "The economics and nutritional impacts of food assistance policies and programs," Food Policy, Elsevier, vol. 42(C), pages 151-163.
    8. Amarante, Véronica & Ferrando, Mery & Vigorito, Andrea, 2011. "School Attendance, Child Labor and Cash Transfer: An impact evaluation of PANES," PEP Policy Briefs 164618, Partnership for Economic Policy (PEP).
    9. Independent Evaluation Group, 2014. "Social Safety Nets and Gender : Learning from Impact Evaluations and World Bank Projects," World Bank Publications, The World Bank, number 21365.
    10. Raymond, Melanie & Sadoulet, Elisabeth, 2003. "Educational Grants Closing the Gap in Schooling Attainment between Poor and Non-Poor," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt60r0x8j4, Department of Agricultural & Resource Economics, UC Berkeley.
    11. Mueller, Valerie & Billings, Lucy & Mogues, Tewodaj & Peterman, Amber & Wineman, Ayala, 2015. "Filling the legal void? Experimental evidence from a community-based legal aid program for gender-equal land rights in Tanzania:," IFPRI discussion papers 1434, International Food Policy Research Institute (IFPRI).
    12. F.Rosati & M. Rossi, 2007. "Impact of school quality on child labor and school attendance: the case of CONAFE Compensatory Education Program in Mexico," UCW Working Paper 21, Understanding Children's Work (UCW Programme).
    13. Brent Robert J., 2013. "A cost-benefit framework for evaluating conditional cash-transfer programs," Journal of Benefit-Cost Analysis, De Gruyter, vol. 4(2), pages 159-180, August.
    14. Estevan, Fernanda, 2013. "The impact of conditional cash transfers on public education expenditures: A political economy approach," European Journal of Political Economy, Elsevier, vol. 32(C), pages 268-284.
    15. Coady, David P., 2004. "Designing and evaluating social safety nets," FCND discussion papers 172, International Food Policy Research Institute (IFPRI).

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:rdevec:v:8:y:2004:i:3:p:440-451. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.