03. Journals
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These are journal articles published in World Bank journals as well as externally by World Bank authors.
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Publication
Persistent Misallocation and the Returns to Education in Mexico
(Published by Oxford University Press on behalf of the World Bank, 2020-06)Over the last two decades, Mexico has experienced macroeconomic stability, an open trade regime, and substantial progress in education. Yet average workers’ earnings have stagnated, and earnings of those with higher schooling have fallen, compressing the earnings distribution and lowering the returns to education. This paper argues that distortions that misallocate resources toward less-productive firms explain these phenomena, because these firms are less intensive in well-educated workers compared with more-productive ones. It shows that while the relative supply of workers with more years of schooling has increased, misallocation of resources toward less-productive firms has persisted. These two trends have generated a widening mismatch between the supply of, and the demand for, educated workers. The paper breaks down worker earnings into observable and unobservable firm and individual worker characteristics, and computes a counterfactual earnings distribution in the absence of misallocation. The main finding is that in the absence of misallocation average earnings would be higher, and that earnings differentials across schooling levels would widen, raising the returns to education. A no-misallocation path is constructed for the wage premium. Depending on parameter values, this path is found to be rising or constant, in contrast to the observed downward path. The paper concludes arguing that the persistence of misallocation impedes Mexico from taking full advantage of its investments in the education of its workforce. -
Publication
The Effect of a Transfer Program for the Elderly in Mexico City on Co-Residing Children's School Enrollment
(Published by Oxford University Press on behalf of the World Bank, 2017-10-01)A regression discontinuity analysis is used to test whether a sharp increase in the government transfers received by households, induced by a pension program for individuals age 70 and older in Mexico City, affects co-residing children's school enrollment. Results show that while household composition and other characteristics do not change significantly at the cutoff age for program eligibility, school enrollment increases significantly. This suggests that households may be credit constrained, as the sharp increase in government transfers is known and anticipated by individuals below the cutoff age. -
Publication
The Effect of Publicly Provided Health Insurance on Education Outcomes in Mexico
(Published by Oxford University Press on behalf of the World Bank, 2016-04-21)In this paper we study the causal effect of a large expansion of publicly provided health insurance on school enrollment rates and on children’s academic performance using the case of Mexico. Access to free health insurance could improve education outcomes directly by making household members healthier or indirectly by raising the amount of resources available for education expenses. Using a panel of municipalities from 2007 to 2010, we find that the expansion of the Mexican public health insurance program, Seguro Popular, had a large positive, statistically significant effect on school enrollment rates and on standardized test scores. -
Publication
Exploring the Differential Impact of Public Interventions on Indigenous People: Lessons from Mexico’s Conditional Cash Transfers Program
(Taylor and Francis, 2015-09-22)This paper uses experimental panel data for Mexico from 1997 to 2000 in order to test assumptions on the impact of a conditional cash transfer (CCT) program on child labor and school attendance, adding to the literature by emphasizing the differential impact on indigenous households. Using data from the CCT program, PROGRESA (later on known as OPORTUNIDADES), we investigate the interaction between child labor, education and indigenous households. While indigenous children had a greater probability of working before the intervention, this probability is reversed after treatment in the program. Indigenous monolingual children also had lower school attainment compared with Spanish-speaking or indigenous bilingual children. After the program, school attainment among indigenous children increased, reducing the gap. In terms of child labor, the larger reduction is in the group of bilingual children.