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

Ciro Avitabiley and Matteo Bobba and Marco Pariguanax

Working Paper from Agence française de développement

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.

Keywords: Amérique latine; Mexique (search for similar items in EconPapers)
JEL-codes: Q (search for similar items in EconPapers)
Pages: 50
Date: 2017-11-30
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Citations: View citations in EconPapers (5)

Published in Research Papers

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