Old-Age Government Transfers and the Crowding Out of Private Gifts: The 70 Plus Program for the Rural Elderly in Mexico
We estimate the crowding out of private transfers caused by 70 y Más, a public assistance program for the rural elderly in Mexico for whom private support is an important source of income. Using data from the Mexican Income and Expenditure Survey and a triple differences approach, we find that the program partially crowds out private giftsby reducing the probability of receiving domestic remittances. As a result, the non-labor income of the program beneficiaries increases by 30 percent less than the expected increase in government transfers resulting from the program. Therefore, reduced domestic transfers dampen the effect of the program and, thus, the public transfer originally targeted to the elderly ends up partially benefiting their donors within Mexico, but not those abroad.
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- Catalina Amuedo-Dorantes & Susan Pozo, 2006. "Remittances as insurance: evidence from Mexican immigrants," Journal of Population Economics, Springer, vol. 19(2), pages 227-254, June.
- 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.
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