IDEAS home Printed from https://ideas.repec.org/a/bpj/bejeap/v10y2010i1n48.html
   My bibliography  Save this article

The Effect of an Old-Age Demogrant on the Labor Supply and Time Use of the Elderly and Non-Elderly in Mexico

Author

Listed:
  • Juarez Laura

    (Instituto Tecnologico Autonomo de Mexico)

Abstract

This paper estimates the effect of a generous demogrant for individuals age 70 and older that started in 2001 in Mexico City on the labor supply and time use of beneficiaries and of non-elderly family members who live with them. Using a triple differences approach, I find that the program has no significant effect on the time use of eligible individuals, except for the sharp decrease in the housework participation of elderly women who live with another potential beneficiary. Individuals 60 to 69 years old change their time use only if they live with a potential beneficiary, but not because they expect to receive the demogrant themselves in a few years. In particular, men in their 60s seem to retire early if they live with someone who qualifies for the transfer. Both men and women 18 to 59 years old increase their labor supply if they live with an eligible man, but decrease it if they live with an eligible woman. These results are consistent with income in the hands of elderly women being shared more with younger family members than income in the hands of elderly men.

Suggested Citation

  • Juarez Laura, 2010. "The Effect of an Old-Age Demogrant on the Labor Supply and Time Use of the Elderly and Non-Elderly in Mexico," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-27, June.
  • Handle: RePEc:bpj:bejeap:v:10:y:2010:i:1:n:48
    DOI: 10.2202/1935-1682.2423
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/1935-1682.2423
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    File URL: https://libkey.io/10.2202/1935-1682.2423?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Esther Duflo, 2003. "Grandmothers and Granddaughters: Old-Age Pensions and Intrahousehold Allocation in South Africa," The World Bank Economic Review, World Bank, vol. 17(1), pages 1-25, June.
    2. Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 988-1010, December.
    3. Jensen, Robert T., 2004. "Do private transfers 'displace' the benefits of public transfers? Evidence from South Africa," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 89-112, January.
    4. Marjorie B. McElroy, 1990. "The Empirical Content of Nash-Bargained Household Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 559-583.
    5. Hurd, Michael D., 1993. "The economics of individual aging," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 16, pages 891-966, Elsevier.
    6. M. Browning & P. A. Chiappori, 1998. "Efficient Intra-Household Allocations: A General Characterization and Empirical Tests," Econometrica, Econometric Society, vol. 66(6), pages 1241-1278, November.
    7. Duncan Thomas, 1990. "Intra-Household Resource Allocation: An Inferential Approach," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 635-664.
    8. Leora Friedberg, 2000. "The Labor Supply Effects of the Social Security Earnings Test," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 48-63, February.
    9. Case, Anne & Deaton, Angus, 1998. "Large Cash Transfers to the Elderly in South Africa," Economic Journal, Royal Economic Society, vol. 108(450), pages 1330-1361, September.
    10. Frederic Vermeulen, 2002. "Collective Household Models: Principles and Main Results," Journal of Economic Surveys, Wiley Blackwell, vol. 16(4), pages 533-564, September.
    11. Browning, Martin & Francois Bourguignon & Pierre-Andre Chiappori & Valerie Lechene, 1994. "Income and Outcomes: A Structural Model of Intrahousehold Allocation," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1067-1096, December.
    12. Marianne Bertrand & Sendhil Mullainathan & Douglas Miller, 2003. "Public Policy and Extended Families: Evidence from Pensions in South Africa," The World Bank Economic Review, World Bank, vol. 17(1), pages 27-50, June.
    13. Moffitt, Robert A., 2002. "Welfare programs and labor supply," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 34, pages 2393-2430, Elsevier.
    14. Gruber, Jonathan & Orszag, Peter, 2003. "Does the Social Security Earnings Test Affect Labor Supply and Benefits Receipt?," National Tax Journal, National Tax Association;National Tax Journal, vol. 56(4), pages 755-773, December.
    15. Apps, P. F. & Rees, R., 1996. "Labour supply, household production and intra-family welfare distribution," Journal of Public Economics, Elsevier, vol. 60(2), pages 199-219, May.
    16. Chiappori, Pierre-Andre, 1997. "Introducing Household Production in Collective Models of Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 191-209, February.
    17. A. J. Auerbach & M. Feldstein (ed.), 2002. "Handbook of Public Economics," Handbook of Public Economics, Elsevier, edition 1, volume 4, number 4.
    18. Shelly J. Lundberg & Robert A. Pollak & Terence J. Wales, 1997. "Do Husbands and Wives Pool Their Resources? Evidence from the United Kingdom Child Benefit," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 463-480.
    19. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    20. Mark Aguiar & Erik Hurst, 2005. "Consumption versus Expenditure," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 919-948, October.
    21. Orazio Attanasio & Valerie 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.
    22. Vermeulen, Frederic, 2002. "Collective Household Models: Principles and Main Results," Journal of Economic Surveys, Wiley Blackwell, vol. 16(4), pages 533-564, September.
    23. Richard Disney & Tanner, Tanner, 2000. "The abolition of the earnings rule for UK pensioners," IFS Working Papers W00/13, Institute for Fiscal Studies.
    24. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    25. Baker, Michael & Benjamin, Dwayne, 1999. "How do retirement tests affect the labour supply of older men?," Journal of Public Economics, Elsevier, vol. 71(1), pages 27-51, January.
    26. Powell, James L., 1984. "Least absolute deviations estimation for the censored regression model," Journal of Econometrics, Elsevier, vol. 25(3), pages 303-325, July.
    27. Jonathan Gruber & David Wise, 2005. "Social Security Programs and Retirement around the World: Fiscal Implications, Introduction and Summary," NBER Working Papers 11290, National Bureau of Economic Research, Inc.
    28. T. Paul Schultz, 1990. "Testing the Neoclassical Model of Family Labor Supply and Fertility," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 599-634.
    29. A. J. Auerbach & M. Feldstein (ed.), 2002. "Handbook of Public Economics," Handbook of Public Economics, Elsevier, edition 1, volume 3, number 3.
    30. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-349, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Zeyuan & Bengtsson, Tommy & Helgertz, Jonas, 2015. "Labor Supply Responses to New Rural Pension Insurances in China: A Regression Discontinuity Approach," Lund Papers in Economic History 139, Lund University, Department of Economic History.
    2. Catalina Amuedo‐Dorantes & Laura Juarez & Jorge Alonso, 2019. "The Effect Of Noncontributory Pensions On Saving In Mexico," Economic Inquiry, Western Economic Association International, vol. 57(2), pages 931-952, April.
    3. Emilio Gutierrez & Laura Juarez & Adrian Rubli, 2017. "The Effect of a Transfer Program for the Elderly in Mexico City on Co-Residing Children's School Enrollment," The World Bank Economic Review, World Bank, vol. 31(3), pages 809-828.
    4. Louise Grogan & Fraser Summerfield, 2019. "Government Transfers, Work, and Wellbeing: Evidence from the Russian Old-Age Pension," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(4), pages 1247-1292, October.
    5. Kaushal, Neeraj, 2014. "How Public Pension affects Elderly Labor Supply and Well-being: Evidence from India," World Development, Elsevier, vol. 56(C), pages 214-225.
    6. Murrugarra, Edmundo, 2011. "Employability and productivity among older workers : apolicy framework and evidence from Latin America," Social Protection Discussion Papers and Notes 63230, The World Bank.
    7. Juarez, Laura, 2009. "Crowding out of private support to the elderly: Evidence from a demogrant in Mexico," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 454-463, April.
    8. Edwin van Gameren & Durfari Velandia Naranjo, 2015. "Working and Caring: The Simultaneous Decision of Labor Force Participation and Informal Elderly and Child Support Activities in Mexico," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 52(2), pages 117-148, November.
    9. Ning, Manxiu & Gong, Jinquan & Zheng, Xuhui & Zhuang, Jun, 2016. "Does New Rural Pension Scheme decrease elderly labor supply? Evidence from CHARLS," China Economic Review, Elsevier, vol. 41(C), pages 315-330.
    10. 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.
    11. Independent Evaluation Group, 2014. "Social Safety Nets and Gender : Learning from Impact Evaluations and World Bank Projects," World Bank Publications - Books, The World Bank Group, number 21365, December.
    12. Chen, Zeyuan & Bengtsson, Tommy & Helgertz, Jonas, 2015. "Labor Supply Responses to New Rural Social Pension Insurance in China: A Regression Discontinuity Approach," IZA Discussion Papers 9360, Institute of Labor Economics (IZA).
    13. Zhu, Alex Yue Feng & Ku, Inhoe & Chan, Wai Sum & Chou, Kee Lee, 2023. "Social pension reform and poverty among older people in Hong Kong: Triple difference estimations," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 105(C).
    14. Bosch, Mariano & Guajardo, Jarret, 2012. "Labor Market Impacts of Non-Contributory Pensions: The Case of Argentina's Moratorium," IDB Publications (Working Papers) 4094, Inter-American Development Bank.
    15. Victor Lyashok, 2019. "The Effect Of Pension Growth On The Labor Force Participation Of Pensioners In Russia," HSE Working papers WP BRP 22/PSP/2019, National Research University Higher School of Economics.
    16. Clemente Ávila‐Parra & David Escamilla‐Guerrero & Oscar Gálvez‐Soriano, 2024. "Minimum eligibility age for social pensions and household poverty: Evidence from Mexico," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 175-196, January.
    17. Edwin Van Gameren & Durfari Velandia Naranjo, 2012. "Working and caring. The simultaneous decision of labor force participation, informal long-term care and childcare services in Mexico," Serie documentos de trabajo del Centro de Estudios Económicos 2012-16, El Colegio de México, Centro de Estudios Económicos.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Donni, Olivier & Molina, José Alberto, 2018. "Household Collective Models: Three Decades of Theoretical Contributions and Empirical Evidence," IZA Discussion Papers 11915, Institute of Labor Economics (IZA).
    2. Chiappori, Pierre-André & Donni, Olivier, 2009. "Non-unitary Models of Household Behavior: A Survey of the Literature," IZA Discussion Papers 4603, Institute of Labor Economics (IZA).
    3. Duha T. Altindag & John Nunley & Alan Seals, 2017. "Child-custody reform and the division of labor in the household," Review of Economics of the Household, Springer, vol. 15(3), pages 833-856, September.
    4. Alberto Alesina & Andrea Ichino & Loukas Karabarbounis, 2011. "Gender-Based Taxation and the Division of Family Chores," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 1-40, May.
    5. Jaime Andrés Sarmiento Espinel, 2012. "Parental investment in their children’s education," Serie documentos de trabajo del Centro de Estudios Económicos 2012-09, El Colegio de México, Centro de Estudios Económicos.
    6. Chiappori, Pierre-André & Donni, Olivier, 2006. "Les modèles non unitaires de comportement du ménage : un survol de la littérature," L'Actualité Economique, Société Canadienne de Science Economique, vol. 82(1), pages 9-52, mars-juin.
    7. Laurens CHERCHYE & Thomas DEMUYNCK & Bram DE ROCK, 2010. "Noncooperative household consumption with caring," Working Papers of Department of Economics, Leuven ces10.34, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    8. Olivier Bargain & Miriam Beblo & Denis Beninger & Richard Blundell & Raquel Carrasco & Maria-Concetta Chiuri & François Laisney & Valérie Lechene & Nicolas Moreau & Michal Myck & Javier Ruiz-Castillo , 2006. "Does the Representation of Household Behavior Matter for Welfare Analysis of Tax-benefit Policies? An Introduction," Review of Economics of the Household, Springer, vol. 4(2), pages 99-111, June.
    9. Laurens Cherchye & Thomas Demuynck & Bram De Rock, 2011. "Revealed Preference Analysis of Non‐Cooperative Household Consumption," Economic Journal, Royal Economic Society, vol. 121(555), pages 1073-1096, September.
    10. Rubalcava, L. & Thomas, D., 2000. "Family Bargaining and Welfare," Papers 00-10, RAND - Labor and Population Program.
    11. Bergolo, Marcelo & Galván, Estefanía, 2018. "Intra-household Behavioral Responses to Cash Transfer Programs. Evidence from a Regression Discontinuity Design," World Development, Elsevier, vol. 103(C), pages 100-118.
    12. Inés Berniell & Dolores de la Mata & Matilde Pinto Machado, 2020. "The Impact of a Permanent Income Shock on the Situation of Women in the Household: The Case of a Pension Reform in Argentina," Economic Development and Cultural Change, University of Chicago Press, vol. 68(4), pages 1295-1343.
    13. Chris Klaveren & Bernard Praag & Henriette Maassen van den Brink, 2008. "A public good version of the collective household model: an empirical approach with an application to British household data," Review of Economics of the Household, Springer, vol. 6(2), pages 169-191, June.
    14. Panayiota Lyssiotou, 2017. "The impact of targeting policy on spouses’ demand for public goods, labor supplies and sharing rule," Empirical Economics, Springer, vol. 53(2), pages 853-878, September.
    15. Alam, Saad, 2012. "The Effect of Gender-Based Returns to Borrowing on Intra-Household Resource Allocation in Rural Bangladesh," World Development, Elsevier, vol. 40(6), pages 1164-1180.
    16. LaFave, Daniel & Thomas, Duncan, 2017. "Extended families and child well-being," Journal of Development Economics, Elsevier, vol. 126(C), pages 52-65.
    17. Jens Bonke & Hans Uldall-Poulsen, 2007. "Why do families actually pool their income? Evidence from Denmark," Review of Economics of the Household, Springer, vol. 5(2), pages 113-128, June.
    18. Robert A. Pollak, 2016. "Marriage Market Equilibrium," NBER Working Papers 22309, National Bureau of Economic Research, Inc.
    19. Matthias Doepke & Michèle Tertilt, 2019. "Does female empowerment promote economic development?," Journal of Economic Growth, Springer, vol. 24(4), pages 309-343, December.
    20. Miriam Beblo & Denis Beninger, 2017. "Do husbands and wives pool their incomes? A couple experiment," Review of Economics of the Household, Springer, vol. 15(3), pages 779-805, September.

    More about this item

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:10:y:2010:i:1:n:48. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.