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Conditional Cash Transfers and Labor Market Conditions

Author

Listed:
  • Molina, Teresa

    (University of Hawaii at Manoa)

  • Vidiella-Martin, Joaquim

    (University of Oxford)

Abstract

Do local labor markets influence the effectiveness of educational policies? To answer this question, we focus on Mexico's conditional cash transfer program, PROGRESA, documented to have increased educational attainment. We show that PROGRESA's impact on schooling was smaller in areas with more export-oriented manufacturing jobs and argue this is because these jobs generate more convex opportunity costs of schooling. Consistent with this, the heterogeneity we document is strongest among those old enough to be working in factory jobs. In addition, this heterogeneity is primarily driven by jobs that directly influence schooling opportunity costs: low-wage jobs and jobs for school-aged workers.

Suggested Citation

  • Molina, Teresa & Vidiella-Martin, Joaquim, 2021. "Conditional Cash Transfers and Labor Market Conditions," IZA Discussion Papers 14667, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14667
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    conditional cash transfers; export manufacturing; Mexico; opportunity costs;
    All these keywords.

    JEL classification:

    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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