THE DEVELOPMENT FIELD AGRICULTURAL & RESOURCE ECONOMICS UNIVERSITY OF CALIFORNIA AT BERKELEY

Poverty tends to be inherited across generations because the poor cannot afford to educate their children and give them good health. To break this vicious circle, many countries have started to recognize the importance of investing massively in the education and health of the children of the rural poor. The Progresa program in Mexico has been a pioneering initiative of this type. At the cost of US$1Billion/year, poor mothers in 2.1 million families are paid to send their children to school. We are participating to the evaluation of the impact of Progresa on educational achievements. Results obtained to this date show that transfers to the poor have helped the children of the poor reach educational attainments equal to those of the non-poor. The program has its greatest impact on children from the poorest households and located further away from schools. However, we also show that identical results could have been reached at a much lower cost through targeting on children at risk of not going to school instead of children in poor households. Making assistance programs more efficient is key if limited foreign aid funds are to make more of a difference on low educational levels among the rural poor.

In the second phase of this project, we are investigating a decentralized cash transfer program, Bolsa Escola, in Brazil. In this case, the municipalities recommend to the Federal government which children are to be awarded cash transfers conditional on school attendance. Forces of the local political economy are thus important in the selection of beneficiaries. We use this to analyze the political forces at play at the local level in selecting the beneficiaries of a federal program.

Phase I: Analysis of the Progresa program (2001-2003)