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High School Track Choice and Liquidity Constraints: Evidence from Urban Mexico

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  • Ciro Avitabiley
  • Matteo Bobba and Marco Pariguanax

Abstract

We study how a large household windfall affects sorting of relatively disadvantaged youth over high school tracks by exploiting the discontinuity in the assignment of a welfare program in Mexico. The in-cash transfer is found to significantly increase the probability of selecting vocational schools as the most preferred options vis-a-vis other more academically oriented education modalities. We find support for the hypothesis that the transfer relaxes the liquidity constraints preventing relatively poor students from choosing a schooling career with higher out-of-pocket expenditures and higher expected returns. The observed change in stated preferences across tracks effectively alters school placement, and bears a positive effect on on-time graduation.

Suggested Citation

  • Ciro Avitabiley & Matteo Bobba and Marco Pariguanax, 2017. "High School Track Choice and Liquidity Constraints: Evidence from Urban Mexico," Working Paper 0195be34-77f6-4879-a68d-e, Agence française de développement.
    • Handle: RePEc:avg:wpaper:en7757
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    References listed on IDEAS

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    Cited by:

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    3. Rohen d’Aiglepierre & Arthur Bauer, 2017. "Teacher training based on the results of research on their actual practices in the context of Sub-Saharan Africa: The OPERA project in Burkina Faso, issues and challenges," Working Paper cacf7616-2ec5-4da2-93df-8, Agence française de développement.
    4. Arthuer Bauer, 2017. "Redistributive Programs’ Implementation: Do Political Incentives Matter ?," Working Paper 35992a1b-607f-43ad-baa0-1, Agence française de développement.
    5. Florent BEDECARRATS & Isabelle GUERIN & François ROUBAUD, 2017. "L'étalon-or des évaluations randomisées : économie politique des expérimentations aléatoires dans le domaine du développement," Working Paper 753120cd-506f-4c5f-80ed-7, Agence française de développement.

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    More about this item

    Keywords

    Amérique latine; Mexique;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics

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