The Effect of a Transfer Program for the Elderly in Mexico City on Co-Residing Children's School Enrollment

Abstract

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.