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Do transfers generate local economy effects?

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  • Armando Barrientos
  • Rachel Sabatés-Wheeler

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.

Suggested Citation

  • Armando Barrientos & Rachel Sabatés-Wheeler, 2009. "Do transfers generate local economy effects?," Global Development Institute Working Paper Series 10609, GDI, The University of Manchester.
  • Handle: RePEc:bwp:bwppap:10609
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    File URL: http://hummedia.manchester.ac.uk/institutes/gdi/publications/workingpapers/bwpi/bwpi-wp-10609.pdf
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    References listed on IDEAS

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    1. 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.
    2. Christopher B. Barrett, 2005. "Rural poverty dynamics: development policy implications," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 45-60, January.
    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. Paul J. Gertler & Sebastian W. Martinez & Marta Rubio-Codina, 2012. "Investing Cash Transfers to Raise Long-Term Living Standards," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 164-192, January.
    6. Hoddinott, John & Skoufias, Emmanuel, 2004. "The Impact of PROGRESA on Food Consumption," Economic Development and Cultural Change, University of Chicago Press, vol. 53(1), pages 37-61, October.
    7. 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.
    8. 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).
    9. Jishnu Das, 2005. "Reassessing Conditional Cash Transfer Programs," World Bank Research Observer, World Bank Group, vol. 20(1), pages 57-80.
    10. Barrett, Christopher B. & McPeak, John G., 2003. "Poverty Traps and Safety Nets," Working Papers 127808, Cornell University, Department of Applied Economics and Management.
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    Cited by:

    1. Mideros A. & Gassmann F. & Mohnen P., 2013. "Estimation of rates of return of social protection instruments. 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).
    2. Armando Barrientos & Rachel Sabates-Wheeler, 2011. "Strategic complementarities and social transfers: how do PROGRESA payments impact nonbeneficiaries?," Applied Economics, Taylor & Francis Journals, vol. 43(23), pages 3175-3185.
    3. Begum, Ismat & Alam, Mohammad & Haque, M., 2015. "Productive Impacts of Cash Transfer and Conditional Cash Transfer Programs in Bangladesh: Propensity Score Matching Analysisi," 2015 Conference, August 9-14, 2015, Milan, Italy 211215, International Association of Agricultural Economists.

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