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A cost-effectiveness analysis of demand- and supply-side education interventions

  • Coady, David P.
  • Parker, Susan W.

This paper is concerned with the issue of the most cost-effective way of improving access to education for poor households in developing countries. We consider two alternatives: (1) extensive expansion of the school system (i.e., bringing education to the poor) and (2) subsidizing investment in education by the poor (i.e., bringing the poor to the education system). To this end, we evaluate the Programa Nacional de Educación, Salud y Alimentación (PROGRESA), a large poverty alleviation program recently introduced in Mexico that subsidizes education. Using double-difference regression estimators on data collected before and after the program for randomly selected control and treatment households, we estimate the relative impacts of the demand- and supply-side program components. Combining these estimates with cost information, we find that the demand-side subsidies are substantially more cost-effective than supply-side expansions.

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Paper provided by International Food Policy Research Institute (IFPRI) in its series FCND briefs with number 127.

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Date of creation: 2002
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Handle: RePEc:fpr:fcndbr:127
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  1. Psacharopoulos, George, 1993. "Returns to investment in education : a global update," Policy Research Working Paper Series 1067, The World Bank.
  2. Eric A. Hanushek, . "Interpreting Recent Research on Schooling in Developing Countries," Wallis Working Papers WP3, University of Rochester - Wallis Institute of Political Economy.
  3. Jean Drèze & Geeta Gandhi Kingdon, 1999. "School Participation in Rural India," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 18, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  4. Schultz, T. Paul, 1988. "Education investments and returns," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 13, pages 543-630 Elsevier.
  5. Kremer, Michael R, 1995. "Research on Schooling: What We Know and What We Don't: A Comment," World Bank Research Observer, World Bank Group, vol. 10(2), pages 247-54, August.
  6. Bouis, Howarth E., 1994. "Agricultural technology and food policy to combat iron deficiency in developing countries," FCND discussion papers 1, International Food Policy Research Institute (IFPRI).
  7. Schultz, T. Paul, 2001. "School subsidies for the poor," FCND discussion papers 102, International Food Policy Research Institute (IFPRI).
  8. Skoufias, Emmanuel & Davis, Benjamin & de la Vega, Sergio, 2001. "Targeting the Poor in Mexico: An Evaluation of the Selection of Households into PROGRESA," World Development, Elsevier, vol. 29(10), pages 1769-1784, October.
  9. Rosenzweig, Mark R & Wolpin, Kenneth I, 1986. "Evaluating the Effects of Optimally Distributed Public Programs: ChildHealth and Family Planning Interventions," American Economic Review, American Economic Association, vol. 76(3), pages 470-82, June.
  10. 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 237-75, October.
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