The Unassuming Economist

Source: Poverty Action Lab, Paris School of Economics

In 1997, the Mexican government designed the conditional cash transfer program Progresa, which became the
worldwide model of a new approach to social programs, simultaneously targeting human capital accumulation
and poverty reduction. This paper studies the differential long-term impact of children’s exposure to Progresa, 20 years after its launch. The two focus groups include (a) children who were in-utero or in their initial years of life, and (b) children who were transitioning from primary to secondary school.

Results show that children exposed to the program in their early childhood witnessed better educational attainment and labor market outcomes, and the study of impacts on the second group shows that even the short-term impact of the program was sustained in the long run. Positive impacts manifested as larger labor incomes, more geographical mobility including through international migration, and later family formation. Besides, results from this paper also confirm that while conditional cash transfers are helpful in enhancing the educational and nutritional development of children in their formative stages, there is still a need for complementary policies to be rolled out so that the full range of households (not just ones with infants at the time of program rollout) are able to realize the full range of newly available labor market opportunities.

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