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The schooling repayment hypothesis for private transfers:Evidence from the PROGRESA/Oportunidades experiment

Author

Listed:
  • Carlos Chiapa

    (Centro de Estudios Económicos, El Colegio de México.)

  • Laura Juarez

    (Centro de Investigación Económica (CIE), Instituto Tecnológico Autónomo de México (ITAM))

Abstract

The schooling repayment hypothesis for private transfers predicts a positive relationship between the amount of parental investment in childrens education and the amount that adult children transfer to their parents. This paper provides evidence on the repayment motive using data from the Mexican conditional cash transfer program PROGRESA/Oportunidades. The program pays a transfer to parents for sending their children to school. Thus, if private transfers from adult children to parents are in part repayment for parental schooling investments made in the past, then PROGRESA/Oportunidades should decrease these transfers, because parents were already exogenously compensated by the government for sending their kids to school and not to work. Exploiting the exogenous variation in the amount of cash transfers a household receives from the program for sending its children to school, we compare the private transfers received in 2007 by parental households who had children 0-16 in 1997 and started receivin the programs bene ts in 1998 with the transfers received by similar parental households who started receiving bene ts in 1999. Our results suggest that (i) there exists a repayment motive and (ii) that PROGRESA/Oportunidades is causing adult children to transfer less resources to their parents.

Suggested Citation

  • Carlos Chiapa & Laura Juarez, 2012. "The schooling repayment hypothesis for private transfers:Evidence from the PROGRESA/Oportunidades experiment," Working Papers 1201, Centro de Investigacion Economica, ITAM.
    • Handle: RePEc:cie:wpaper:1201
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    References listed on IDEAS

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    More about this item

    Keywords

    Parental schooling investments; schooling repayment hypothesis; intergenerational transfers; PROGRESA/Oportunidades.;
    All these keywords.

    JEL classification:

    • D19 - Microeconomics - - Household Behavior - - - Other
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J19 - Labor and Demographic Economics - - Demographic Economics - - - Other

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