Abstract

This paper identifies neighborhood peer effects on children's school enrollment decisions using experimental evidence from the Mexican PROGRESA program. We use exogenous variation in the school participation of program-eligible children to identify peer effects on the schooling decisions of ineligible children residing in treatment communities. We find that peers have considerable influence on the enrollment decisions of program-ineligible children, and these effects are concentrated among children from poorer households. These findings imply that policies aimed at encouraging enrollment can produce large social multiplier effects.

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