This paper uses data from a randomized social experiment in Mexico to estimate
and validate a dynamic behavioral model of parental decisions about fertility and
child schooling, to evaluate the effects of the PROGRESA school subsidy program,
and to perform a variety of counterfactual experiments of policy alternatives. Our
method of validation estimates the model without using post-program data and then
compares the models predictions about program impacts to the experimental
impact estimates. The results show that the models predicted program impacts
track the experimental results. Our analysis of counterfactual policies reveals an
alternative subsidy schedule that would induce a greater impact on average school
attainment at similar cost to the existing program.
Todd, Petra E. and Kenneth I. Wolpin.
2006."Assessing the Impact of a School Subsidy Program in Mexico: Using a Social Experiment to Validate a Dynamic Behavioral Model of Child Schooling and Fertility."American Economic Review,
96(5): 1384-1417.DOI: 10.1257/aer.96.5.1384