++ The authors gratefully acknowledge support from the UNICEF/ILO/World Bank Understanding

test several assumptions regarding the impact of a conditional cash transfer program on child labor, emphasizing the differential impact on indigenous households. Using data from the conditional cash transfer program, PROGRESA (OPORTUNIDADES), in Mexico, we investigate the interaction between child labor and indigenous households. While indigenous children had a greater probability of working in 1997, this probability is reversed after treatment in the program. Indigenous children also had lower school attainment compared with Spanish-speaking or bilingual children. After the program, school attainment among indigenous children increased, reducing the gap