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Research Paper No. 35 | High School Track Choice and Liquidity Constraints: Evidence from Urban Mexico

  • 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.
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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.

Titre : Research Paper No. 35 | High School Track Choice and Liquidity Constraints: Evidence from Urban Mexico

Collection : Papiers de Recherche

N° : 35


Année : 2017

Langue : EN

Auteur(s) : Ciro AVITABILEY, Matteo BOBBA, Marco PARIGUANAX, Ciro AVITABILEY, Matteo BOBBA, Marco PARIGUANAX1849;ID:3509

Thème(s) : Education et formation / Démographie / Santé / Mutations sociales

Géographie(s) : Mexique

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