Re-evaluating conditional cash transfers: is the Oportunidades primary school stipend necessary?

Primary school enrolment and completion rates are almost universal in rural Mexico. Not surprisingly, estimates of impact suggest marginal effects of OPORTUNIDADES on primary school enrolment, which raises concerns about inefficiencies in the current transfer scheme. While removing the primary school component would involve substantial budget savings, equity and distributional concerns may argue against this alternative. In this paper, we investigate whether the primary school transfer generates positive externalities in the household. Specifically, we exploit the randomized nature of the data and baseline household structure to isolate the impact of the primary school transfer from the overall average treatment effect. Preliminary findings suggest no direct effects of the primary school grant on other outcomes, namely child health, household consumption and secondary school enrolment.