Education Choices in Mexicoby Attanasio, Meghir & Santiago

Comments by Francisco H.G. Ferreira

Summary

Question: What was the impact of PROGRESA on school enrolment?

Summary

Question: What was the impact of PROGRESA on school enrolment?

Answer 1: Randomization at village level permits use of simple differences on post-treatment sample. Finds significant positive impact, but both for eligible and non-eligible households. (Schultz, 2001)

Summary Problem 1: Randomization did not balance

sample on pre-treatment enrollment (Behrman & Todd, 2000).

Solution 1: Differences-in-differences reveal significant positive impact for eligible households, and insignificant for non-eligible.

Problem 2: Do “announcement effects” affect credibility of control villages as appropriate counterfactual?

Problem 3: How can we investigate the likely effects of changes in program design?

Solution 2: Estimate structural model for the occupational choice of children.

Main Comment/Question Combination of randomized quasi-experimental

data and structural model definitely the right direction.

But I wonder whether use of a full dynamic programming model of occupational choice was not an overshooting in imposition of structure:

Two occupational categories only. Terminal values as quadratic function of final schooling. Discount factor of 0.9.

More flexible structures available through current value multinomial logits, with means-testing and conditionality restrictions.

Other questions1. Does allowing for announcement effects go in

the right direction? Shouldn’t the difference in the impact of the grant between treatment and control fall as control knows it will receive treatment next year? It seems to rise (Table 14).

2. How is the individual wage variable constructed? Was there an Appendix?

3. Overall balance: main reason to estimate a model of behaviour is to investigate impact of changes in program design. Perhaps a more flexible model, with more simulation exercises?