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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

Author Info

Listed author(s):
  • Catalina Amuedo-Dorantes

    ()

    (Department of Economics, San Diego State University)

  • Laura Juarez

    ()

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

Abstract

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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File URL: http://ftp.itam.mx/pub/academico/inves/laura/12-05.pdf
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Paper provided by Centro de Investigacion Economica, ITAM in its series Working Papers with number 1205.

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Length: 29 pages
Date of creation: 2012
Handle: RePEc:cie:wpaper:1205
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Keywords: Old-age governemnt transfers; crwoding-out; remittances; Mexico;

Find related papers by 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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  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. 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, July.
  2. 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.

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