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Do transfers generate local economy effects?

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  • Armando Barrientos
  • Rachel Sabatés-Wheeler
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    Abstract

    The paper examines local economy effects of social transfers, by focusing on food consumption and asset holdings of non-eligible households in rural Mexico following the introduction of PROGRESA in 1997. The quasi-experimental nature of the evaluation data collected for the purposes of evaluating the impact of PROGRESA enables the quantification of this impact. In the paper we compare welfare indicators among noneligible households in treatment areas and control areas. The analysis finds that noneligible households in treatment areas show significantly higher levels of food consumption and asset holdings following the introduction of PROGRESA, compared to non-eligible households in control areas. These results are interpreted to suggest that transfers in poor rural areas in Mexico enable agents to interact more strategically such that non-beneficiaries, as well as beneficiaries, reap consumption and production advantages.

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    File URL: http://www.bwpi.manchester.ac.uk/medialibrary/publications/working_papers/bwpi-wp-10609.pdf
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    Bibliographic Info

    Paper provided by BWPI, The University of Manchester in its series Brooks World Poverty Institute Working Paper Series with number 10609.

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    Date of creation: 2009
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    Handle: RePEc:bwp:bwppap:10609

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    1. Angelucci, Manuela & De Giorgi, Giacomo, 2006. "Indirect Effects of an Aid Program: The Case of Progresa and Consumption," IZA Discussion Papers 1955, Institute for the Study of Labor (IZA).
    2. Hoddinott, John & Skoufias, Emmanual, 2003. "The impact of Progresa on food consumption," FCND briefs 150, International Food Policy Research Institute (IFPRI).
    3. Dasgupta, Partha, 1997. "Nutritional status, the capacity for work, and poverty traps," Journal of Econometrics, Elsevier, vol. 77(1), pages 5-37, March.
    4. Sadoulet, Elisabeth & Janvry, Alain de & Davis, Benjamin, 2001. "Cash Transfer Programs with Income Multipliers: PROCAMPO in Mexico," World Development, Elsevier, vol. 29(6), pages 1043-1056, June.
    5. Barrett, Christopher B., 2003. "Rural Poverty Dynamics: Development Policy Implications," Working Papers 127243, Cornell University, Department of Applied Economics and Management.
    6. Orazio Attanasio & Valérie Lechene, 2002. "Tests of Income Pooling in Household Decisions," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 720-748, October.
    7. Jishnu Das, 2005. "Reassessing Conditional Cash Transfer Programs," World Bank Research Observer, World Bank Group, vol. 20(1), pages 57-80.
    8. Laura B. Rawlings, 2005. "Evaluating the Impact of Conditional Cash Transfer Programs," World Bank Research Observer, World Bank Group, vol. 20(1), pages 29-55.
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    Cited by:
    1. Mideros Mora, Andres & Gassmann, Franziska & Mohnen, Pierre, 2013. "Estimation of rates of return on social protection: Making the case for non-contributory social transfers in Cambodia," MERIT Working Papers 063, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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