Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/161129
Authors: 
Avitabile, Ciro
Bobba, Matteo
Pariguana, Marco
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers 10506
Abstract: 
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.
Subjects: 
school choice
tracking
financial constraints
vocational education
returns to education
regression discontinuity design
JEL: 
I21
I24
J24
Document Type: 
Working Paper

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