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Description:
This paper investigates the effects of short-run economic shocks on children`s progress through school in urban Brazil using a unique panel data set. The severe problem of grade repetition in Brazil contributes to overall low education levels. Of children ages 10-15 who are enrolled in school, only 69 percent advance on average to the next grade. This paper investigates whether children`s effort on schoolwork is diminished when parents experience a transitory shock to income.