PROGRESA, T. PAUL SCHULTZ

Question 1

📘 Flashcard 1: What is the main question Schultz investigates using PROGRESA?

Answer 1

The study investigates whether conditional cash transfers (CCTs) increase school enrollment among poor rural children in Mexico. Schultz evaluates PROGRESA, a large-scale government program launched in 1997 that provided monthly cash payments to poor households, conditional on children’s regular school attendance and health checkups.

The core question is whether financial incentives targeted to poor families can effectively reduce school dropout rates, particularly at the secondary level, where dropouts are most common.

Question 2

🧪 Flashcard 2: What empirical method does the study use, and how is it classified?

Answer 2

A:
Schultz employs a randomized controlled trial (RCT) design, making PROGRESA one of the earliest large-scale applications of RCTs in development economics.

506 localities were selected for the study. A subset was randomly assigned to treatment (beginning in 1998), and the rest served as controls (starting in 2000).
The analysis compares enrollment outcomes between treatment and control villages, controlling for household and individual characteristics.
This setup qualifies as a randomized field experiment, ensuring that observed differences in outcomes are causally attributable to the program.

Question 3

🎓 Flashcard 3: What were the key findings about PROGRESA’s impact on school enrollment?

Answer 3

PROGRESA significantly increased school enrollment among children eligible for subsidies, especially:

Among girls: enrollment increased by 9.3 percentage points at the secondary level.
Among boys: the increase was 6.8 percentage points.
Effects were largest for older children (grades 7–9) and those from the poorest households, where dropout risks were highest.

This confirms that conditional financial support effectively alters household decisions and reduces barriers to continued schooling.

Question 4

📊 Flashcard 4: What data were used, and how was program impact measured?

Answer 4

Data came from the PROGRESA evaluation surveys, which tracked over 24,000 households across 506 villages, including detailed information on:

School enrollment and attendance
Household demographics and income
Program eligibility and compliance
Program impact was estimated by comparing enrollment rates in treatment and control villages, using difference-in-means and regression-adjusted estimators, with controls for baseline variables and fixed effects.

Additionally, some analyses used propensity-score matching as a robustness check to verify internal validity.

Question 5

🧩 Flashcard 5: How does the study reflect critically on its findings and method?
A:
Schultz notes several limitations and reflections:

Spillover effects may bias estimates downward if control villages benefited indirectly (e.g., via social networks).
The RCT was conducted in rural areas only, so urban generalizability is uncertain.
The study did not observe long-term labor market outcomes, leaving open the question of whether schooling gains translate into higher earnings.
However, he emphasizes the importance of experimental evidence in informing policy and the efficiency of targeting, given that resources went to those most likely to drop out.