BobonisFinan_REStat08

BobonisFinan_REStat08 - Neighborhood Peer Effects in...

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Neighborhood Peer Effects in Secondary School Enrollment Decisions Gustavo J. Bobonis and Frederico Finan Current Version: February 2008 First Version: September 2003 Abstract: This paper identifies neighborhood peer effects on children’s school enrollment decisions using experimental evidence from the Mexican PROGRESA program. We use exogenously variation in the school enrollment of program eligible children to identify peer effects on the schooling decisions of ineligible children residing in treatment communities. We find that peers have considerable influence on the enrollment decisions of program-ineligible children, and these effects are concentrated among children from poorer households. These findings imply that policies aimed at encouraging enrollment can produce large social multiplier effects. Previous versions of this paper were entitled “Endogenous Peer Effects in School Participation” and “Do Transfers to the Poor Increase the Schooling of the Non-Poor: The Case of Mexico’s PROGRESA Program”. We are grateful to Josh Angrist, David Card, Ken Chay, Alain de Janvry, Weili Ding, Chris Ferrall, John Hoddinott, Caroline Hoxby, Asim Khwaja, David S. Lee, Steve Lehrer, Craig McIntosh, Rob McMillan, Ted Miguel, Elisabeth Sadoulet, Aloysius Siow, T. Paul Schultz, Duncan Thomas, the editor, and two anonymous referees, whose suggestions greatly improved the paper. We also thank seminar participants at Berkeley, Queen’s, Toronto, CIRPÉE, and NEUDC 2003 and 2005 Conferences for helpful comments. We thank Caridad Araujo, Paul Gertler, Sebastián Martínez, Iliana Yaschine, and the staff at Oportunidades for providing administrative data and for their general support throughout. Bobonis acknowledges financial support from the Institute of Business and Economics Research at UC Berkeley and NICHD Training Grant (T32 HD07275). Finan acknowledges financial support from the Social Science Research Council. Contacts: G. Bobonis, Department of Economics, University of Toronto, Sidney Smith Hall, 100 Saint George Street Room 4057, Toronto, Ontario, M5S 3G3, Canada. Tel: 416-946-5299. E-mail: gustavo.bobonis@utoronto.ca . F. Finan, Department of Economics, UCLA, Bunche Hall, Box 951477, Los Angeles, CA 90095-1477, USA. Tel: 310-794-5958. Fax: 310-825-9528. E-mail: ffinan@econ.ucla.edu .
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1 1. Introduction Low secondary school enrollment rates remain an important concern for much of the developing world. Despite significant improvements over the last 40 years, secondary school enrollment rates in 2000 were only 54 percent among low income countries (Glewwe and Kremer 2005). Given that education fosters growth and improves welfare, promoting secondary school enrollment represents an important policy issue. 1 To design appropriate and effective policies as a redress for low enrollment rates, it is necessary to understand individuals’ decisions to enroll into secondary school.
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BobonisFinan_REStat08 - Neighborhood Peer Effects in...

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