Prospering through Prospera: CCT Impacts on Educational Attainment and Achievement in Mexico

This paper develops and estimates a dynamic model of student enrollment, school choice, aca-demic achievement and grade progression to evaluate the impacts of Mexico’s conditional cash transfer program Prospera on educational outcomes over grades 4-9. Academic achievement is measured by nationwide standardized test scores in mathematics and Spanish. Enrollment deci-sions are the outcomes of sequential decisions at each age from individuals’ feasible choice sets, determined by the types of schools locally available and local-labor-market opportunities. The achievement production function has a value-added structure. Model parameters are estimated by maximum likelihood using nationwide administrative test-score data (the ENCEL data) com-bined with survey data from students and parents, census labor-market data, and geo-coded school-location data. The estimation approach controls for selective school enrollment in di?erent types of schools, grade retention and unobserved heterogeneity. The results show that the Pros-pera program increases school enrollment and academic achievement for program beneficiaries in lower-secondary school grades (grades 7-9). The average test-score impacts are 0.09-0.13 stan-dard deviations in mathematics and 0.03-0.05 standard deviations in Spanish. Students from the most disadvantaged backgrounds experience the largest impacts. The availability of telesecondary distance-learning schools is shown to be an important determinant of the Prospera program’s impacts on educational outcomes.