The effect of school grants on test scores: experimental evidence from Mexico

We use a randomized experiment (across 200 public primary schools in Puebla, Mexico) to study the impact of providing schools with cash grants on student test scores. Treated schools received on average ∼ 16 USD per student each year for two years, an increase of ∼ 20% in public spending per child, after teacher salaries. Overall, the grants had no impact on student test scores, enrollment, grade repetition, or pass rates. Lack of a treatment effect does not seem to be driven by poor implementation or a substitution away from other inputs (e.g., household expenditure).