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Old-Age Government Transfers and the Crowding Out of Private Gifts: The 70 and Above Program for the Rural Elderly in Mexico

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  • Amuedo Dorantes Catalina
  • Juárez González Laura

Abstract

This paper estimates the crowding out of private transfers caused by 70 y Más -a public assistance program for rural elderly adults in Mexico, for whom family support is an important source of income. Using data from the National Household Income and Expenditure Survey and a triple-difference estimation, we find that the program crowds out private transfers by 37 percent, and it does so mainly by reducing the probability of receiving domestic remittances. As a result, the non-labor income of beneficiaries increases by less than their government transfers. Thus, by reducing their private support to elderly adults, domestic donors are dampening the effect of the program, although not completely neutralizing it.

Suggested Citation

  • Amuedo Dorantes Catalina & Juárez González Laura, 2013. "Old-Age Government Transfers and the Crowding Out of Private Gifts: The 70 and Above Program for the Rural Elderly in Mexico," Working Papers 2013-17, Banco de México.
    • Handle: RePEc:bdm:wpaper:2013-17
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    Cited by:

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    2. Tobias Pfutze & Carlos Rodríguez-Castelán, 2019. "Can a Small Social Pension Promote Labor Force Participation? Evidence from the Colombia Mayor Program," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2019), pages 111-154, October.
    3. Jing You & Miguel Niño-Zarazúa, 2017. "Smoothing or strengthening the ‘Great Gatsby Curve’? The intergenerational impact of China’s New Rural Pension Scheme," WIDER Working Paper Series 199, World Institute for Development Economic Research (UNU-WIDER).
    4. Kang, Ji Young & Park, Sojung & Ahn, Seoyeon, 2022. "The effect of social pension on consumption among older adults in Korea," The Journal of the Economics of Ageing, Elsevier, vol. 22(C).
    5. Jorge Alonso & Catalina Amuedo-Dorantes & Laura Juárez, 2016. "The Effect of Non-contributory Pensions on Saving in Mexico," IDB Publications (Working Papers) 95976, Inter-American Development Bank.
    6. Pedro Orraca-Romano, 2015. "Does access to free health insurance crowd-out private transfers? Evidence from Mexico’s Seguro Popular," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-34, December.
    7. Ana P. Canedo, 2023. "The Unintended Effects of Social Pensions on Migration: Evidence from Rural Mexico," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 42(1), pages 1-25, February.
    8. Xing Ji & Jingwen Xu & Hongxiao Zhang, 2022. "How Does China’s New Rural Pension Scheme Affect Agricultural Production?," Agriculture, MDPI, vol. 12(8), pages 1-23, July.
    9. Miguel Ángel Borrella Mas & Mariano Bosch Mossi & Marcello Sartarelli, 2016. "Non-Contributory Pensions Number-Gender Effects on Poverty and Household Decisions," Working Papers. Serie AD 2016-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

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    More about this item

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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