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

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  • Amuedo-Dorantes, Catalina

    () (San Diego State University)

  • Juarez, Laura

    () (Bank of Mexico)

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 family support is an important source of income. Using data from the Mexican Income and Expenditure Survey and a triple difference approach, we find that the program crowds out private gifts by 37 percent, and it does so mostly by reducing the probability of receiving domestic remittances. As a result, the non-labor income of beneficiaries increases by less than their government transfers. Thus, by reducing their private support to the elderly, domestic donors are dampening the effect of the program, although not completely neutralizing it.

Suggested Citation

  • Amuedo-Dorantes, Catalina & Juarez, Laura, 2013. "Old-Age Government Transfers and the Crowding Out of Private Gifts: The 70 and Above Program for the Rural Elderly in Mexico," IZA Discussion Papers 7786, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7786
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Jorge Alonso & Catalina Amuedo-Dorantes & Laura Juárez, 2016. "The Effect of Non-contributory Pensions on Saving in Mexico," IDB Publications (Working Papers) 7861, Inter-American Development Bank.
    2. Pfutze,Tobias & Rodriguez Castelan,Carlos, 2015. "Can a small social pension promote labor force participation ? evidence from the Colombia Mayor program," Policy Research Working Paper Series 7516, The World Bank.
    3. Jing You & Miguel Niño-Zarazúa, 2017. "Smoothing or strengthening the ‘Great Gatsby Curve’? The intergenerational impact of China’s New Rural Pension Scheme," WIDER Working Paper Series 199, World Institute for Development Economic Research (UNU-WIDER).
    4. Gary Mena & Werner L. Hernani-Limarino, 2015. "Intended and Unintended Effects of Unconditional Cash Transfers: The Case of Bolivia's Renta Dignidad," IDB Publications (Working Papers) 7350, Inter-American Development Bank.
    5. Jorge Alonso & Catalina Amuedo-Dorantes & Laura Juárez, 2016. "The Effect of Non-contributory Pensions on Saving in Mexico," IDB Publications (Working Papers) 95976, Inter-American Development Bank.
    6. Orraca Romano, Pedro Paulo, 2016. "Essays on development and labour economics for Mexico," Economics PhD Theses 0816, Department of Economics, University of Sussex.
    7. Pedro Orraca-Romano, 2015. "Does access to free health insurance crowd-out private transfers? Evidence from Mexico’s Seguro Popular," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-34, December.
    8. Miguel Ángel Borrella Mas & Mariano Bosch Mossi & Marcello Sartarelli, 2016. "Non-Contributory Pensions Number-Gender Effects on Poverty and Household Decisions," Working Papers. Serie AD 2016-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

    More about this item

    Keywords

    crowding-out; old-age government transfers; remittances; Mexico;

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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