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The schooling repayment hypothesis for private transfers:Evidence from the PROGRESA/Oportunidades experiment

Listed author(s):
  • Carlos Chiapa

    ()

    (Centro de Estudios Económicos, El Colegio de México.)

  • Laura Juarez

    ()

    (Centro de Investigación Económica (CIE), Instituto Tecnológico Autónomo de México (ITAM))

The schooling repayment hypothesis for private transfers predicts a positive relationship between the amount of parental investment in childrens education and the amount that adult children transfer to their parents. This paper provides evidence on the repayment motive using data from the Mexican conditional cash transfer program PROGRESA/Oportunidades. The program pays a transfer to parents for sending their children to school. Thus, if private transfers from adult children to parents are in part repayment for parental schooling investments made in the past, then PROGRESA/Oportunidades should decrease these transfers, because parents were already exogenously compensated by the government for sending their kids to school and not to work. Exploiting the exogenous variation in the amount of cash transfers a household receives from the program for sending its children to school, we compare the private transfers received in 2007 by parental households who had children 0-16 in 1997 and started receivin the programs bene ts in 1998 with the transfers received by similar parental households who started receiving bene ts in 1999. Our results suggest that (i) there exists a repayment motive and (ii) that PROGRESA/Oportunidades is causing adult children to transfer less resources to their parents.

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Paper provided by Centro de Investigacion Economica, ITAM in its series Working Papers with number 1201.

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Length: 45 pages
Date of creation: 2012
Handle: RePEc:cie:wpaper:1201
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  1. Emmanuel Skoufias & Susan Wendy Parker, 2001. "Conditional Cash Transfers and Their Impact on Child Work and Schooling: Evidence from the PROGRESA Program in Mexico," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2001), pages 45-96, August.
  2. Cheolsung Park, 2014. "Why do children transfer to their parents? Evidence from South Korea," Review of Economics of the Household, Springer, vol. 12(3), pages 461-485, September.
  3. Rafael Lalive & M. Alejandra Cattaneo, 2009. "Social Interactions and Schooling Decisions," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 457-477, August.
  4. Cox, Donald & Eser, Zekeriya & Jimenez, Emmanuel, 1998. "Motives for private transfers over the life cycle: An analytical framework and evidence for Peru," Journal of Development Economics, Elsevier, vol. 55(1), pages 57-80, February.
  5. Raut, Lakshmi K. & Tran, Lien H., 2005. "Parental human capital investment and old-age transfers from children: Is it a loan contract or reciprocity for Indonesian families?," Journal of Development Economics, Elsevier, vol. 77(2), pages 389-414, August.
  6. Becker, Gary S, 1993. "Nobel Lecture: The Economic Way of Looking at Behavior," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 385-409, June.
  7. Lee Lillard & Robert Willis, 1997. "Motives for interqenerational transfers: Evidence from Malaysia," Demography, Springer;Population Association of America (PAA), vol. 34(1), pages 115-134, February.
  8. Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1029-1059, October.
  9. Cigno, Alessandro, 1993. "Intergenerational transfers without altruism : Family, market and state," European Journal of Political Economy, Elsevier, vol. 9(4), pages 505-518, November.
  10. Paul Schultz, T., 2004. "School subsidies for the poor: evaluating the Mexican Progresa poverty program," Journal of Development Economics, Elsevier, vol. 74(1), pages 199-250, June.
  11. Arrondel, Luc & Masson, Andre, 2006. "Altruism, exchange or indirect reciprocity: what do the data on family transfers show?," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
  12. 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, vol. 54(1), pages 237-275, October.
  13. Gustavo J. Bobonis & Frederico Finan, 2009. "Neighborhood Peer Effects in Secondary School Enrollment Decisions," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 695-716, November.
  14. Cox, Donald C & Jimenez, Emmanuel, 1992. "Social Security and Private Transfers in Developing Countries: The Case of Peru," World Bank Economic Review, World Bank Group, vol. 6(1), pages 155-169, January.
  15. Skoufias, Emmanuel & Parker, Susan W., 2001. "Conditional cash transfers and their impact on child work and schooling," FCND briefs 123, International Food Policy Research Institute (IFPRI).
  16. Cheolsung Park, 2003. "Are children repaying parental loans? Evidence from Malaysia using matched child-parent pairs," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(2), pages 243-263, 05.
  17. Guttman, Joel M., 2001. "Self-enforcing reciprocity norms and intergenerational transfers: theory and evidence," Journal of Public Economics, Elsevier, vol. 81(1), pages 117-151, July.
  18. Jere R. Behrman & Susan W. Parker & Petra E. Todd, 2011. "Do Conditional Cash Transfers for Schooling Generate Lasting Benefits?: A Five-Year Followup of PROGRESA/Oportunidades," Journal of Human Resources, University of Wisconsin Press, vol. 46(1), pages 93-122.
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