The longer-term effects of human capital enrichment programs on poverty and inequality : Oportunidades in Mexico

Previous empirical research has shown that Mexico’s Oportunidades program has succeeded in increasing schooling and improving health of disadvantaged children. This paper studies the program’s potential longer-term consequences for the poverty and inequality of these children. It adapts methods developed in DiNardo, Fortin and Lemieux (1996) and incorporates existing experimental estimates of the program’s effects on human capital to analyze how Oportunidades will affect future earnings of program participants. We nonparametrically simulate earnings distributions, with and without the program, and predict that Oportunidades will increase future mean earnings but have only modest effects on poverty rates and earnings inequality.Oportunidades, Human capital, Schooling, Health, Poverty, Inequality.

The Production of Cognitive Achievement in Children: Home, School and Racial Test Score Gaps

This paper studies the determinants of children’s scores on tests of cognitive achievement in math and reading. Using rich longitudinal data on test scores, home environments, and schools, we implement alternative specifications for the production function for achievement and test their assumptions. We do not find support for commonly used restrictive models that assume test scores depend only on contemporaneous inputs or that assume conditioning in a lagged score captures the effects of all past inputs. Instead, the results show that both contemporaneous and lagged inputs matter in the production of current achievement and that it is important to allow for unobserved child-specific endowment effects and endogeneity of inputs. Using a specification that incorporates these features, we analyze sources of test score gaps between black, white and Hispanic children. The estimated model captures key patterns in the data, such as the widening of minority-white test score gaps with age, which is most pronounced for black children.Education production function, racial test score gaps, school quality, child development and cognitive achievement

A Note on Adapting Propensity Score Matching and Selection Models to Choice Based Samples

The probability of selection into treatment plays an important role in matching and selection models. However, this probability can often not be consistently estimated, because of choice-based sampling designs with unknown sampling weights. This note establishes that the selection and matching procedures can be implemented using propensity scores fit on choice-based samples with misspecified weights, because the odds ratio of the propensity score fit on the choice-based sample is monotonically related to the odds ratio of the true propensity scores.choice-based sampling, matching models, propensity scores, selection models

Ex Ante Evaluation of Social Programs

This paper discusses methods for evaluating the impacts of social programs prior to their implementation. Ex ante evaluation is useful for designing programs that achieve some optimality criteria, such as maximizing impact for a given cost. This paper illustrates through several examples the use of behavioral models in predicting the impacts of hypothetical programs. Among the programs considered are wage subsidy programs, conditional cash transfer programs, and income support programs. In some cases, the behavioral model justifies a completely nonparametric estimation strategy, even when there is no direct variation in the policy instrument. In other cases, stronger modeling and/or functional form assumptions are required to evaluate a program ex ante. We illustrate the application of ex ante evaluation methods using data from the PROGRESA school subsidy experiment in Mexico. We assess the effectiveness of the method by comparing ex ante predictions of program impacts to the impacts measured under the randomized experiment.ex-ante evaluation, matching, evaluation methods, school subsidy programs

How Beliefs about HIV Status Affect Risky Behaviors: Evidence from Malawi, Second Version

This paper examines whether and to what extent changes in beliefs about own HIV status induce changes in risky sexual behavior using data from married males living in three regions of Malawi. Risky behavior is measured as the propensity to engage in extramarital affairs. The empirical analysis is based on panel surveys for years 2006 and 2008 from the Malawi Diffusion and Ideational Change Project (MDICP), which contain detailed information on beliefs about HIV status and on sexual behaviors. Many individuals change their beliefs over time, because of opportunities to get tested for HIV and informational campaigns. We estimate the effect of belief revisions on the propensity to engage in extra-marital affairs using a panel data estimator developed by Arellano and Carrasco (2003), which accommodates unobserved heterogeneity as well as belief endogeneity arising from the dependence of current beliefs on lagged behaviors. We find that downward revisions in the belief of being HIV positive lead to an increased propensity to engage in extra-marital affairs and upward revisions to a decreased propensity. The estimates are shown to be robust to underreporting of affairs. Using our estimates and a standard epidemeological model of disease transmission, we find that increasing the responsiveness of beliefs to test results would reduce the HIV transmission rate as infected individuals reduce sexual behavior and decrease the likelihood that uninfected persons have contact with an HIV-positive person.AIDS, Malawi, Beliefs

How Beliefs About HIV Status affect Risky Behaviors: Evidence From Malawi, Second Version

This paper examines how beliefs about own HIV status affect sexual behavior. Risky behavior is measured as the propensity to engage in extramarital affairs or not use condoms. The empirical analysis is based on 2004 and 2006 data from the Malawi Diffusion and Ideational Change Project. Controlling for endogeneity between beliefs and risk-taking, we find that downward revisions in the belief of being HIV positive lead to a lower propensity to engage in extramarital affairs but have no effect on condom use. We show that the estimates provide a lower bound when there is measurement error in reported extra-marital affairs.Beliefs,AIDS,Malawi

How Beliefs about HIV Status Affect Risky Behaviors: Evidence from Malawi, Fifth Version

This paper examines how beliefs about own HIV status affect decisions to engage in risky sexual behavior using data on married males living in Malawi. Risky behavior is measured as the propensity to engage in extramarital affairs. The empirical analysis is based on panel surveys for years 2006 and 2008 from the Malawi Diffusion and Ideational Change Project (MDICP). Beliefs vary significantly over time in the data, in part because of HIV testing and informational campaigns. We estimate the effect of beliefs about own HIV status on risky behavior using a panel data estimator developed by Arellano and Carrasco (2003), which accommodates unobserved heterogeneity as well as belief endogeneity arising from the dependence of current beliefs on lagged behaviors. We find that beliefs are an important determinant of risky behavior, with downward revisions in the belief of being HIV positive increasing risky behavior and upward revisions decreasing it. We modify Arellano and Carrasco’s (2003) estimator to allow for underreporting of affairs and find the estimates to be relatively robust to underreporting. Using our estimates and a prototypical epidemiological model of disease transmission, we show that making individuals better informed about their HIV status, either by increasing the credibility of test results and/or increasing access to testing, would on net reduce the HIV transmission rate.Beliefs, Malawi, HIV

Earnings Functions and Rates of Return

The internal rate of return to schooling is a fundamental economic parameter that is often used to assess whether expenditure on education should be increased or decreased. This paper considers alternative approaches to estimating marginal internal rates of return for different schooling levels. We implement a general nonparametric approach to estimate marginal internal rates of return that take into account tuition costs, income taxes and nonlinearities in the earnings-schooling-experience relationship. The returns obtained by the more general method differ substantially from Mincer returns in levels and in their evolution over time. They indicate relatively larger returns to graduating from high school than from graduating from college, although both have been increasing over time.schooling, marginal internal rate of return, nonparametric estimation

How Beliefs about HIV Status Affect Risky Behaviors: Evidence from Malawi, Sixth Version

This paper examines how beliefs about own HIV status affect decisions to engage in risky sexual behavior (as measured by extramarital affairs) and analyzes the potential for interventions that influence beliefs, such as HIV testing and informational campaigns, to reduce transmission rates. The empirical analysis is based on a panel survey of married males for years 2006 and 2008 from the Malawi Diffusion and Ideational Change Project (MDICP). In the data, beliefs about HIV status vary significantly geographically and over time, in part because of newly available testing opportunities and because of cultural differences. We estimate the effect of beliefs on risky behavior using Arellano and Carrasco’s (2003) semiparametric panel data estimator, which accommodates unobserved heterogeneity and belief endogeneity. Results show that changes in the belief of being HIV positive induce changes in risky behavior. Downward revisions in beliefs increase risky behavior and upward revisions decrease it. We modify Arellano and Carrasco’s (2003) estimator to allow for underreporting of extramarital affairs and find the estimates to be robust. Using the estimates and a prototypical epidemiological model of disease transmission, we show that better informing people about their HIV status on net reduces the population HIV transmission rate.Malawi,HIV,beliefs

Long-Term Impacts of the Oportunidades Conditional Cash Transfer Program on Rural Youth in Mexico

This paper studies the long-term effects of participation in the Mexican Oportunidades program on a variety of outcomes and behaviors of rural youth in Mexico. It analyzes data from a social experiment, which randomly phased-in the program in rural Mexican villages. In 1997, 320 villages (the treatment group) were randomly selected for early incorporation into the program and 186 villages (the control group) were designated as a control group to be incorporated eighteen months later. This paper examines whether differential exposure to the program significantly impacted educational attainment, labor market outcomes, marriage, migration and cognitive achievement of youth. The results show positive impacts of longer exposure on grades of schooling attained, but no effects on achievement tests. With respect to work, we find an overall reduction in work for male youth.