Helping Children Catch Up: Early Life Shocks and the PROGRESA Experiment
Working Paper 24848
DOI 10.3386/w24848
Issue Date
Can investing in children who faced adverse events in early childhood help them catch up? We answer this question using two orthogonal sources of variation – resource availability at birth (local rainfall) and cash incentives for school enrollment – to identify the interaction between early endowments and investments in children. We find that adverse rainfall in the year of birth decreases grade attainment, post-secondary enrollment, and employment outcomes. But children whose families were randomized to receive conditional cash transfers experienced a much smaller decline: each additional year of program exposure during childhood mitigated more than 20 percent of early disadvantage.