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

  • Laura Juarez

    ()

    (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM))

This paper investigates the effect of a generous demogrant for the elderly that started in 2001 in Mexico City on the labor supply and time use of the elderly and of non-elderly family members who live with them. Using data for the period 2000-2004 and a triple differences approach, I find that prime-age women reduce both their housework and market work time significantly, but only if they live with an age-qualifying woman in a poor neighborhood after the program started. In contrast, the program seems to have no significant effect on the time use of prime-age men. My results suggest that some of the public resources devoted to the elderly could actually spill over to other age groups, especially in countries where extended families are common, and that the gender of the potential beneficiary matters for outcomes.

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Paper provided by Centro de Investigacion Economica, ITAM in its series Working Papers with number 0706.

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Length: 25 pages
Date of creation: Nov 2007
Date of revision:
Handle: RePEc:cie:wpaper:0706
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  1. 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.
  2. Anne Case & Angus Deaton, 1996. "Large Cash Transfers to the Elderly in South Africa," NBER Working Papers 5572, National Bureau of Economic Research, Inc.
  3. Leora Friedberg, 1999. "The Labor Supply Effects of the Social Security Earnings Test," NBER Working Papers 7200, National Bureau of Economic Research, Inc.
  4. Gruber, Jonathan & Orszag, Peter, 2003. "Does the Social Security Earnings Test Affect Labor Supply and Benefits Receipt?," National Tax Journal, National Tax Association, vol. 56(4), pages 755-73, December.
  5. 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.
  6. 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.
  7. 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.
  8. Marianne Bertrand & Douglas Miller & Sendhil Mullainathan, 2000. "Public Policy and Extended Families: Evidence from South Africa," NBER Working Papers 7594, National Bureau of Economic Research, Inc.
  9. Richard Disney & Sarah Tanner, 2000. "The abolition of the earnings rule for UK pensioners," IFS Working Papers W00/13, Institute for Fiscal Studies.
  10. Jonathan Gruber & Peter Orszag, 2000. "Does the Social Security Earnings Test Affect Labor Supply and Benefits Receipt?," NBER Working Papers 7923, National Bureau of Economic Research, Inc.
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