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 hypothe- sis that the receipt of unearned income allows some students to choose a schooling career with higher out-of-pocket expenditures and higher expected returns. The ob- served change in stated preferences across tracks effectively alters school placement, and bears a positive effect on later education outcomes.
school choice; tracking; financial constraints; vocational education; returns to education; regression discontinuity design;
- D83: Search • Learning • Information and Knowledge • Communication • Belief
- I21: Analysis of Education
- I24: Education and Inequality
- J24: Human Capital • Skills • Occupational Choice • Labor Productivity
Ciro Avitabile, Matteo Bobba, and Marco Pariguana, “High School Track Choice and Financial Constraints:Evidence from Urban Mexico”, TSE Working Paper, n. 16-661, June 2016, revised May 2017.
TSE Working Paper, n. 16-661, June 2016, revised May 2017