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Old-Age Government Transfers and the Crowding Out of Private Gifts: The 70 Plus Program for the Rural Elderly in Mexico


  • Catalina Amuedo-Dorantes

    () (Department of Economics, San Diego State University)

  • Laura Juarez

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


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.

Suggested Citation

  • Catalina Amuedo-Dorantes & Laura Juarez, 2012. "Old-Age Government Transfers and the Crowding Out of Private Gifts: The 70 Plus Program for the Rural Elderly in Mexico," Working Papers 1205, Centro de Investigacion Economica, ITAM.
  • Handle: RePEc:cie:wpaper:1205

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    References listed on IDEAS

    1. 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.
    2. Catalina Amuedo-Dorantes & Susan Pozo, 2006. "Remittances as insurance: evidence from Mexican immigrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(2), pages 227-254, June.
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    Cited by:

    1. Laura Juarez & Tobias Pfutze, 2015. "The Effects of a Noncontributory Pension Program on Labor Force Participation: The Case of 70 y Más in Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 63(4), pages 685-713.
    2. Independent Evaluation Group, 2014. "Social Safety Nets and Gender : Learning from Impact Evaluations and World Bank Projects," World Bank Publications, The World Bank, number 21365.

    More about this item


    Old-age governemnt transfers; crwoding-out; remittances; Mexico;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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