The impact of conditional cash transfer programs on education: Evidence from Mexico's Progresa

This thesis examines the effects of Mexico’s conditional cash transfer program Progresa—later Oportunidades and Prospera—on educational attainment and labor market participation of young individuals. While extensive research has documented the program’s short-term impacts on school enrollment, health outcomes, and poverty reduction, evidence on its medium- and long-term consequences remains limited. Using longitudinal data from the Mexican Family Life Survey (MxFLS), this study investigates whether exposure to Progresa influenced children’s educational trajectories, delayed their entry into the labor market, and contributed to intergenerational educational mobility. The analysis relies on Ordinary Least Squares (OLS) regressions to estimate the impact of program participation on schooling continuity, transition from primary to secondary education, and labor market participation among young individuals of working age. The findings suggest that Progresa positively affected school continuation—particularly during the critical transition to lower secondary education—and reduced the likelihood of early labor force entry. Additionally, exposure to Progresa is associated with modest improvements in intergenerational educational mobility. Results indicate that the program effectively promoted human capital accumulation, however, it remains uncertain how these educational gains will translate into concrete economic outcomes. According to human capital theory, higher levels of schooling should lead to better labor market results, yet this process ultimately depends on the actual conditions and opportunities offered by the labor market. These findings contribute to the broader debate on the effectiveness of conditional cash transfer programs and offer insights to enhance long-term poverty reduction strategies through human capital investment.