Chile’s Indigenous Grants Program (Beca Indígena)
Introduction
Chile’s Beca Indígena is a large-scale, renewable conditional cash transfer that has provided grants to indigenous students since 1991. The program serves students enrolled in upper-primary, secondary, and tertiary education, with eligibility based on certified indigenous ancestry, a proxy-means test, minimum prior-year grades, and application. The program expanded from roughly 300 grants in 1991 to more than 92,000 in 2021.
Lucas, McEwan, and Irribarra (2025) estimate the long-run and intergenerational effects of the program by exploiting variation in expected grant exposure across indigenous status and birth cohorts. Non-indigenous cohorts were never eligible, while indigenous cohorts born after 1974 became increasingly exposed as the program expanded. Using survey and administrative data, the paper finds that additional grant exposure increased schooling, labor supply, and earnings, and improved the educational outcomes of beneficiaries’ children.
MVPF = 29.0
Net Cost
The net cost is calculated for the combined 1999 and 2000 indigenous birth cohorts, with all values expressed in 2022 USD and discounted to 2009 using a 5.5 percent social discount rate (SNI 2024).
Total costs include direct program expenditures and induced education spending, net of fiscal externalities.
Direct program expenditures equal 777 USD per eligible child, including grant payments and 5 percent administrative overhead. Increased schooling attainment induces additional public education spending of 1,480 USD per child, based on the estimated increase in years of schooling and secondary education spending per student.
These costs are partially offset by increased tax revenue from higher earnings. The fiscal externality is calculated using a 19 percent consumption tax and a marginal propensity to consume of 0.5 (Barrero et al. 2020), while conservatively assuming no additional income tax payments. The resulting net government cost is 566 USD per eligible child.
Willingness to Pay
Willingness to pay is measured as the present discounted value of after-tax lifetime earnings gains among eligible individuals in the 1999 and 2000 cohorts. The calculation applies estimated earnings effects (32 percent for these cohorts) to lifecycle earnings profiles derived from the 2022 CASEN household survey.
The analysis adjusts for lower baseline earnings among indigenous individuals, incorporates a 0.5 percent annual real wage growth assumption, and deducts consumption taxes to obtain after-tax earnings. The resulting estimate of 16,106 USD reflects private returns to increased human capital for the directly treated generation.
The baseline WTP measure excludes intergenerational benefits, such as improvements in children’s educational outcomes, and therefore represents a conservative estimate of total benefits.
MVPF Summary
The MVPF is calculated as the ratio of willingness to pay to net government cost. The baseline estimate of 29 implies that each dollar of net government spending generates substantially larger benefits to recipients.
A conservative sensitivity analysis that reduces estimated earnings effects by half yields an MVPF of approximately 6.
References
Barrero, Alfonso, Markus Kirchner, Camilo N. Pérez, and Andrés Sansone (2020). Estimación del impacto del Covid-19 en los ingresos de hogares, medidas de apoyo y efectos en el consumo. Minutas Citadas en Recuardros IPoM, División Política Monetaria, Banco Central de Chile. https://www.bcentral.cl/documents/33528/2688278/Minuta_Citadas_en_Recuadros_del_IPoM_Dic_2020.pdf
Lucas, Adrienne M., Patrick J. McEwan, and David Torres Irribarra (2025). “The Long-Run and Intergenerational Effects of Conditional Cash Transfers: Evidence from Chile’s Indigenous Grants.” NBER Working Paper No. 33798. https://www.nber.org/papers/w33798
Sistema Nacional de Inversiones (SNI), Ministerio de Desarrollo Social y Familia. (2024). Precios Sociales (Reporte Annual). Downloaded July 25, 2024 from https://sni.gob.cl/storage/docs/Informe_precios_sociales_2024_SNI-Chile.pdf.
Policy Features
- Category
- Education
- Sub-Category
- Cash Transfers
- Beneficiary Type(s)
- Children and Youth, College enrollees, Primary school enrollees, Secondary school enrollees, Students
- Average Age
- Approximate range: 10-21 (from 5th grade primary through tertiary)
- Country of Implementation
- Chile
- Year of Implementation
- 1991
- Empirical Method
- Event Study
- Research Type
- Primary
- Peer Reviewed
- No
- MVPF Publication Link
- www.nber.org/papers/w33798