Understanding Mechanisms Underlying the Long-term Effects of Scholarships for Secondary School: Evidence from a Large Field Experiment in Colombia

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Posso, Christian
- Affiliation: College of Arts and Sciences, Department of Economics

Abstract

I examine the long-term effects of educational subsidies programs on adult labor market outcomes through the accumulation of human capital. Combining experimental variation with an appropriate econometric model, I present sufficient conditions to identify the long-term effects on adult outcomes of educational subsidies programs under the presence of unobserved confounders that affect both the causal mechanism and the adult labor market outcomes. Using a large-scale program that randomized scholarships for private secondary school among disadvantaged students in Bogota Colombia in 1994, and Colombias administrative records covering schooling decisions and labor outcomes up to 15 years after the scholarship lottery, I find causal effect of the program on wages and labor force participation through the accumulation of human capital is significant and strong. I also find evidence of dynamic selection on educational attainment and selection on gains. The results provide important implications for the design of educational programs that target young disadvantaged children with the intent to develop human capital in the long run.

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