Supply of schooling and dropout rates: Evidence from the Oportunidades programme in Mexico

Abstract

AbstractIn this article we provide evidence that measures of school supply, such as quantity and quality at the local level, are important predictors of dropout behaviour among conditional cash transfer beneficiaries in Mexico. We use administrative records of the Oportunidades programme in both rural and urban areas to follow the schooling trajectory of a cohort of students from sixth grade to high school. Under half of rural beneficiaries attending sixth grade make it to the tenth grade. Our regression analysis indicates that the absence of a junior high school in a locality increases the probability of dropping out after sixth grade by 6.8 percentage points; the absence of a high school increases the probability of dropping out after ninth grade by 12.2 percentage points. This means that 16% of all rural sixth‐grade students would enter tenth grade if they had junior high and high schools in their localities. Attending a low‐quality junior high school increases the probability of dropping out after ninth grade by 13 percentage points in rural areas and 7.6 percentage points in urban areas.