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Wealthy, healthy, and wise: does money compensate for being born into difficult conditions?


  • James Manley

    () (Department of Economics, Towson University)

  • Lia Fernald

    (School of Public Health, UC Berkeley)

  • Paul Gertler

    (Haas School of Business, UC Berkeley)


Recent studies have linked transfers from Mexican conditional cash transfer program Oportunidades (formerly PROGRESA) to improvements in child development (Fernald, Gertler, and Neufeld 2008, 2009) but this work has been crit icized as failing to account for endogeneity of the transfers. We create an exogenous instrume nt for the amount of tran sfers and use it to test program and transfer effects. A pplying the new instrument confirms that improvements in child development are more linked to the transfers themselves than to other portions of the program, which involve medical checkups as well as educational sessions for mothers. We also find evidence that the program facilitates catch-up growth, a phenomenon of disputed importance in the health literature.

Suggested Citation

  • James Manley & Lia Fernald & Paul Gertler, 2012. "Wealthy, healthy, and wise: does money compensate for being born into difficult conditions?," Working Papers 2012-01, Towson University, Department of Economics, revised Feb 2012.
  • Handle: RePEc:tow:wpaper:2012-01

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    Cited by:

    1. Kerris Cooper & Kitty Stewart, 2017. "Does Money Affect Children’s Outcomes? An update," CASE Papers /203, Centre for Analysis of Social Exclusion, LSE.

    More about this item


    PROGRESA; Oportunidades; conditional cas h transfers; instrument al variables; child development; child health; Mexico.;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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