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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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  • Coady, David P. & Parker, Susan W., 2002. "A cost-effectiveness analysis of demand- and supply-side education interventions," FCND discussion papers 127, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:fcnddp:127

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    References listed on IDEAS

    1. Schultz, T. Paul, 2001. "School subsidies for the poor," FCND briefs 102, International Food Policy Research Institute (IFPRI).
    2. Hanushek, Eric A, 1995. "Interpreting Recent Research on Schooling in Developing Countries," World Bank Research Observer, World Bank Group, vol. 10(2), pages 227-246, August.
    3. 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).
    4. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
    5. 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 470-482, June.
    6. Dreze, Jean & Kingdon, Geeta Gandhi, 2001. "School Participation in Rural India," Review of Development Economics, Wiley Blackwell, vol. 5(1), pages 1-24, February.
    7. 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.
    8. 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.
    9. 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.
    10. 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 247-254, August.
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    1. repec:ilo:ilowps:427404 is not listed on IDEAS
    2. Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 2009. "The Effects of Multinational Production on Wages and Working Conditions in Developing Countries," World Scientific Book Chapters,in: Globalization And International Trade Policies, chapter 17, pages 623-687 World Scientific Publishing Co. Pte. Ltd..
    3. Antonopoulos, Rania., 2009. "The unpaid care work : paid work connection," ILO Working Papers 994274043402676, International Labour Organization.
    4. Stefan Mann, 2006. "Merit goods in a utilitarian framework," Review of Political Economy, Taylor & Francis Journals, vol. 18(4), pages 509-520.
    5. Glick, Peter, 2008. "What Policies will Reduce Gender Schooling Gaps in Developing Countries: Evidence and Interpretation," World Development, Elsevier, vol. 36(9), pages 1623-1646, September.
    6. Amanda Glassman & Jessica Todd, 2007. "Performance-Based Incentives for Health: Conditional Cash Transfer Programs in Latin America and the Caribbean," Working Papers 120, Center for Global Development.
    7. World Bank & Observatoire National de la Pauvreté et de l’Exclusion Sociale, 2014. "Investing in People to Fight Poverty in Haiti : Reflections for Evidence-based Policy Making
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      ," World Bank Other Operational Studies 21519, The World Bank.


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