Previous research in developed countries suggests that sports participation can positively influence child development. We use panel data of a cohort of 658 children in Peru to test this relationship in a less developed country where conditions for child development are worse. To identify the causal effect of children’s sport participation we exploit the panel structure of our data together with using propensity score matching. Our findings suggest that participation in a sports group has positive impacts on two of the key factors that are identified in the literature as central to child development, i.e. subjective health and social capital.