An impact Evaluation of Agricultural Subsidies on Human Capital Development and Poverty Reudction: Evidence from Rural Mexico
AbstractThe Mexican Government initiated two innovative programs cash transfer schemes in the last decade: PROGRESA, which is a national anti-poverty scheme directed at chronic rural poverty, and PROCAMPO, a scheme designed to compensate farmers for the negative price effects of NAFTA. The analysis of data collected for an evaluation of PROGRESA suggests that the overall level of food consumption and health check-ups is lower among PROGRESA households that also participate in PROCAMPO. This may be due to lower outcome levels at baseline, but also because PROCAMPO households are agricultural producers and thus face a higher shadow price of time in the face of credit or labor market imperfections. In addition, PROGRESA households attain higher levels of human capital investment after only one year of program participation compared to PROCAMPO households who have been in that program for four years. And while PROCAMPO households have higher levels of investment spending, this does not lead to significantly higher levels of consumption relative to PROGRESA households. The overall conclusions are that program conditionality does influence longer-term (human capital) and medium term (productive) investment decisions, the receipt of multiple forms of treatment by beneficiaries can affect the overall impact of each individual program, and conditional transfers may have muted effects among agricultural households in the face of market imperfections.
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Bibliographic InfoPaper provided by Inter-American Development Bank, Office of Evaluation and Oversight (OVE) in its series OVE Working Papers with number 0305.
Length: 28 pages
Date of creation: Jul 2005
Date of revision:
Cash Transfers; Agricultural Households; Mexico; Poverty.;
Find related papers by JEL classification:
- D1 - Microeconomics - - Household Behavior
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
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