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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.
pdf : 3.49 MB
author(s) :
Ciro Avitabiley
Matteo Bobba and Marco Pariguanax
collection :
Research Papers
issn :
2492-2846
pages :
50
number :
35
available also in : en
3.49 MB (pdf)
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