Stanford Development Economics Seminar with Michael Kremer
In the 1990s, Colombia’s PACES program sought to expand secondary school access for socioeconomically disadvantaged students by awarding them vouchers to attend private schools. Combining lottery and administrative data for over twenty years, we demonstrate that PACES vouchers greatly increased intergenerational mobility through increased tertiary education access and completion, and greater formal sector earnings and consumption typically associated with the middle class. We also demonstrate that the PACES program was able to simultaneously expand secondary school access and improve intergenerational mobility at a low or possibly negative cost to taxpayers. Finally, voucher impacts on outcomes associated with intergenerational mobility are entirely driven by vocational school applicants, which we argue is consistent with an important role for horizontal market product differentiation in driving the voucher results.
Michael Kremer is the Gates Professor of Developing Societies in the Department of Economics at Harvard University and co-recipient of the 2019 Nobel Memorial Prize of Economic Sciences. He is a Fellow of the American Academy of Arts and Sciences, a recipient of a MacArthur Fellowship and a Presidential Faculty Fellowship, and was named a Young Global Leader by the World Economic Forum. Kremer’s recent research examines education, health, water, and agriculture in developing countries. He has been named as one of Scientific American’s 50 researchers of the year, and has won awards for his work on health economics, agricultural economics, and on Latin America. He helped develop the advance market commitment (AMC) for vaccines to stimulate private investment in vaccine research and the distribution of vaccines for diseases in the developing world. In the fall of 2010 he became the founding Scientific Director of Development Innovation Ventures (DIV) at USAID. Kremer received his PhD in Economics from Harvard University.
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