In this application, we propose to extend a parent grant that investigates the effect of a unique poverty alleviation program called PROGRESA on child health and nutrition in Mexico. The proposed extension is to investigate the impact of economic development and poverty reduction on adolescent risk behavior. Specifically, we will evaluate the impact of PROGRESA on drug, alcohol and tobacco use, and on sexual practices. Since PROGRESA increases household income and provides financial incentives for children to stay in school, we will be testing the hypothesis that improving the education and living conditions of adolescents in extremely poor households reduces risky behaviors. We hypothesize that improved education and living conditions will reduce adolescent alcohol, tobacco and drug use, and will reduce sexual practices leading to unwanted pregnancies and sexually transmitted diseases. Our analysis will take advantage of a matched case-control longitudinal design. In 2002, the program, previously well established in rural areas, began incorporating beneficiaries in large urban areas. The government engaged faculty from Berkeley and other institutions to prospectively evaluate the impact of the program in these areas. In 2002, UC Berkeley, along with it's partner the Mexican National Institute of public Health (INSP) conducted a baseline survey of 16,000 households in treatment and comparison areas. A follow-up survey funded by the Mexican Government will be implemented by the INSP in 2004. We propose to use funding from this proposal to substantially enhance the adolescent risk behavior module for the 2004 survey, adding questions about sexual risk behavior, administering the questions with audio computer assisted technology (A-CASI), and collecting samples for biological endpoints. The risk module will be administered to close to 10,000 adolescents age 15-22. In this project, we propose to test the hypothesis that a poverty reduction program will reduce the rates of risky behavior in adolescents, by adding an adolescent risk behavior module to the 2003 survey funded by the parent grant. Therefore, this proposal is related to the parent grant through a common survey and taking advantage of the PKOGRESA intervention to study the impact of poverty alleviation on individual health and welfare. Our research will be guided by the theoretical model of behavioral economics.