Nature of the Treatment

Oportunidades is a poverty alleviation program targeting families living in extreme poverty in Mexico. This program articulates different development initiatives of the federal government aimed at combating poverty nationwide. In addition to the cash transfer component, Oportunidades comprises a variety of social programs in the areas of financial inclusion, self-employment, education, health, diet habits, and general

wellbeing. This kind of model emphasizing the provision of wrap-around services takes into account the whole need of the poor family, including the needs of the children. It is very likely that the large effects of private schooling found in this dissertation are the product of the interaction of a comprehensive set of interventions with private schooling. In this scenario, the bundle of services and programs comprised in Oportunidades would produce effects in achievement only in combination with private school characteristics, either measured or unmeasured in this study. For example, it might be the case that the increase on student school attendance caused by Oportunidades (as it will be shown later in this section), only makes a difference in achievement in students attending private schools, if students in private schools, for example, experience more learning time than students in public schools. Another possible explanation is that the presumably superior higher quality of private schools are more likely to have effect on children for whom other supports are present –as provided by Oportunidades—than for children facing the stresses of poverty. So Oportunidades creates a context that enables students to more readily benefit from the superior quality of a private education, and for this reason the effects found in this research are higher than the effects documented in other studies

where those enabling conditions of a comprehensive poverty alleviation program are not present.

One of the components of Oportunidades that might be positively interacting with private schooling, is the income support element provided by the program in the way of a cash transfer. Researchers have provided different explanations as for why family income might affect children development. Given the link between poverty in an early age and children development, supporting the income of families with young children may have long-lasting effects on educational outcomes. For example, Dahl and Lochner (2008) use variations in the amount of the Earned Income Tax Credit (EITC) as an instrumental variable to measure the causal impact of increase of income in educational achievement. They found that a $1,000 increase in income raises combined math and reading test scores by 6 percent standard deviations. Also, income support policies ensure a basic level of sustenance to families, which might not only help them escape poverty, but also provide them with a certain sense of relieve and tranquility. In fact, one of the vehicles through which poverty might negatively influence children’s outcomes, is through the effects that parental psychological distress commonly associated to poverty causes (McLoyd, 1990). Parents in poverty are much likely to experience high level of

psychological distress, which in turn affects children’s socioemotional wellbeing through its impact on parent’s behavior and practices towards the children. For example, Parker et al. (1999) report that poverty adversely affects children’s outcomes, especially school readiness. Attitudes and practices commonly associated to poverty and the stress it produces, such as parental aggravation and strictness, have a negative effect on child’s distractibility and hostility in the classroom, which in turn predict a decrease in

associative vocabulary skills. The income relief located at the center of Oportunidades might be positively affecting educational achievement through this mean13. Of course, this would only be true if the positive family effect produced by this component of the program positively interacts with characteristics only present or predominant in private schools.

Besides alleviating family and environmental stress, there are other pathways through which Oportunidades may affect child development and educational outcomes. Oportunidades may also positively affect parental investment. For example, Gordon et al (2008) reported that increases in incomes generated by expansion of the EITC program targeting the poor, improved low-income children’s educational achievement. In the same sense, research in Mexico has shown that there is a positive association between income level and the size of family educational investment on their children, such as investment in books and other resources associated with better educational outcomes (Treviño, 2005).

In addition to that, parents who are poor have more mental health problems than economically advantaged parents, which translate into child rearing problems (McLoyd, 1990). It is possible that the poverty alleviation provided by the program is contributing positively to the mental health of parents and, through this way, the wellbeing of children. But Oportunidades might also positively affect the IQ of children. Research has proved that persistent poverty has detrimental effects on IQ and school achievement (McLoyd, 1998). The economic relieve provided to the families by Oportunidades might have positive effects on cognitive development of children and their performance in school.

But the effect of Oportunidades in children achievement can be even more direct than what the arguments presented above implied. A number of recent studies suggest that wrap-around interventions with an educational program at the center might be responsible for large achievement effects on children. For example, using admission lotteries Curto and Fryer (2011) reported that a charter boarding school in Washington DC called SEED, raised substantially the educational achievement of participants. SEED combines a charter school adhered to the “No Excuses” model and a five-day-a-week boarding program. Attending a SEED school increased student achievement in mathematics by 0.23 standard deviations per year. It is very difficult to technically disentangle the effect of the individual component of these comprehensive programs. In this case, for example, we cannot say with certainty if the achievement effect is mainly due to the charter school or if it is a combined effect of the charter and the boarding component.

Another example of this kind of comprehensive intervention is the Harlem Children’s Zone (HCZ). The HCZ combines community programs with charter schooling. According to a lottery and instrumental variable identification strategy, Dobbie and Fryer (2009) found that the effects of the program in elementary school, closed the racial achievement gap in English Language Art (ELA) and in mathematics. Students in the HCZ elementary school raised their achievement 0.80 to 1.5 standard deviations in math and ELA. These results are even larger than the ones found in this dissertation. Authors of this study believe that it is the interaction of community programs and school intervention what produces these large results. They even

entertained the idea that the community programs work as a key “technology shifter” in the manufacture of achievement.

The interaction between private schooling and the bundle of complementary social programs comprised in Oportunidades, might explain in part the large private school effect on achievement found in this dissertation. Oportunidades might have an effect on student achievement by providing certain home conditions and incentives that positively interact with private schooling. In fact, different studies have already found that Oportunidades has a positive significant effect on school enrollment (Parker, Todd, & Wolpin, 2006), school attainment (Behrman, Gallardo-García, Parker, Todd, & Vélez- Grajales, 2010; Lalive & Cattaneo, 2006) and students’ time devoted to homework (Behrman et al., 2010). Researchers have found that there are even significant spillover effects of Oportunidades to program non-participants (Lalive & Cattaneo, 2006).

All this evidence shows that the large size of the private school advantage could be attributed in part to the fact that the treatment under study is much more complex than just private schooling.