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E d u c a T i o n Mexico’s Oportunidades Program Fails to Make the Grade in NYC By Brett Fawley and Luciana Juvenal Children in school in norogachi, Mexico. © T yrone Turner/naTional GeoGraphic SocieT y/corbiS N ew York City Mayor Michael Bloom- berg announced in March that his city would not be extending the program on the receipt of that cash force investment in “human capital,” ideally lessening future dependence on the state. To infer that percent, and by 17 it was 26 percent. Where did they go? At 11 years of age, 4.26 and 1.69 percent of boys and girls, respectively, Opportunity NYC-Family Rewards. Aimed Opportunity NYC failed due to fundamen- reported being employed. By age 16, those at alleviating the burden of poverty among tal differences between rural poverty in numbers were 48.65 for males and 13.22 the city’s most disadvantaged citizens, the Mexico and urban poverty in the United percent for females.3 privately funded conditional cash transfer States, however, neglects that—beyond The Oportunidades program was designed (CCT) program was introduced in Septem- name, objective and CCTs—the programs to address the financial constraints prevent- ber 2007 as the first comprehensive initiative themselves were fundamentally different. ing students from continuing their educa- of its kind to be attempted in the developed The purpose of this article is to clarify why tion. Every two months, eligible mothers of world.1 Three years later, the program that the programs must be considered indepen- students with attendance of at least 85 per- many, including the mayor, had hoped dently and to highlight one story that the cent received a cash subsidy. This subsidy, would compete for public funding is instead data from Opportunity NYC told.2 compensating for approximately 40 percent scheduled to end in August. of the child’s lost wages, increased with age Meanwhile, in Mexico, the CCT program Oportunidades: Enabling and earning power, an acknowledgement of that directly inspired its New York cousin is Each year, teenagers around the globe the root cause of dropping out. widely considered a success. Fourteen years drop out of school not because they fail to Of the 506 very similar poor rural com- munities initially selected to receive the To infer that Opportunity NYC failed due to fundamental dif- benefits of the program, eligible families in 320 randomly chosen communities ferences between rural poverty in Mexico and urban poverty were designated to receive the first round in the United States, however, neglects that—beyond name, of benefits in 1998.4 Immediately, the “treated” villages saw a statistically signifi- objective and CCTs (conditional cash transfers)—the programs cant increase in enrollment compared with themselves were fundamentally different. the “control” villages, which did not receive cash subsidies. The percent of 14-, 15- and ago, Oportunidades (then PROGRESA) appreciate the opportunities education offers 16-year-olds enrolled in school increased by initiated cash payments to 300,000 impov- but because they cannot afford the invest- 16, 5 and 6 percent respectively.5 erished rural families for actively managing ment. The economic concept of opportunity The potential for CCTs to positively influ- their health and keeping their children in cost, which captures the mutually exclusive ence school drop-out rates is not confined school. Today, having survived multiple nature of decisions, permits this even when to the developing world. British and Aus- political regimes, the program provides school is free. In developing countries such tralian programs that offered financially direct cash support to 5 million poor Mexi- as Mexico, where compulsory education and eligible students regular cash payments can families (86 percent from rural areas) child labor laws exist but are poorly enforced, for staying in school are credited with an at an annual cost of $3.62 billion. the opportunity cost of education (not earn- average four percentage point increase in The overarching objective and means of ing a wage) is often prohibitively high for the proportion of low-income students achieving that objective were the same in the poor. Original survey data collected by maintaining post-compulsory enrollment. both programs: impede the intergenera- Oportunidades demonstrates this. As late as The full impact is not completely ascrib- tional transmission of poverty by use of 11 years of age, 92 percent of the rural Mexi- able to drawing employed students back to CCTs. Cash today lessens the strains of can children who were surveyed were still school (estimates are that two-thirds of the poverty immediately; conditions imposed in school. By 15, that number dropped to 39 increase in U.K. enrollment is attributable to 10 The Regional Economist | July 2010 Effect on 9th-Graders Attempting and Earning 11 or More Units in the First Year of Opportunity NYC EndnotEs 1 Beneficiaries of CCTs receive direct cash Academically Prepared Academically Unprepared payments in return for taking specific actions
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