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The Impacts of Cash and In-Kind Transfers on Consumption and Labor Supply: Experimental Evidence from Rural Mexico

Author

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  • Skoufias, Emmanuel

    () (The World Bank)

  • Gonzalez-Cossio, Teresa

    (The World Bank)

Abstract

The authors use the unique experimental design of the Food Support Program (Programa Apoyo Alimentario) to analyze in-kind and cash transfers in the poor rural areas of southern states of Mexico. They compare the impacts of monthly in-kind and cash transfers of equivalent value (mean share 11.5 percent of pre-program consumption) on household welfare as measured by food and total consumption, adult labor supply, and poverty. The results show that approximately two years later the transfer has a large and positive impact on total and food consumption. There are no differences in the size of the effect of transfer in cash versus transfers in-kind on consumption. The transfer, irrespective of type, does not affect overall participation in labor market activities but induces beneficiary households to switch their labor allocation from agricultural to nonagricultural activities. The analysis finds that the program leads to a significant reduction in poverty. Overall, the findings suggest that the Food Support Program intervention is able to relax the binding liquidity constraints faced by poor agricultural households, and thus increases both equity and efficiency.

Suggested Citation

  • Skoufias, Emmanuel & Gonzalez-Cossio, Teresa, 2008. "The Impacts of Cash and In-Kind Transfers on Consumption and Labor Supply: Experimental Evidence from Rural Mexico," Policy Research Working Paper Series 4778, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4778
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    References listed on IDEAS

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    Cited by:

    1. Hidrobo, Melissa & Hoddinott, John & Peterman, Amber & Margolies, Amy & Moreira, Vanessa, 2014. "Cash, food, or vouchers? Evidence from a randomized experiment in northern Ecuador," Journal of Development Economics, Elsevier, vol. 107(C), pages 144-156.
    2. Fiszbein, Ariel & Kanbur, Ravi & Yemtsov, Ruslan, 2014. "Social Protection and Poverty Reduction: Global Patterns and Some Targets," World Development, Elsevier, vol. 61(C), pages 167-177.
    3. Skoufias, Emmanuel & Lindert, Kathy & Shapiro, Joseph, 2010. "Globalization and the Role of Public Transfers in Redistributing Income in Latin America and the Caribbean," World Development, Elsevier, vol. 38(6), pages 895-907, June.
    4. Leibbrandt, Murray & Lilenstein, Kezia & Shenker, Callie & Woolard, Ingrid, 2013. "The influence of social transfers on labour supply: A South African and international review," SALDRU Working Papers 112, Southern Africa Labour and Development Research Unit, University of Cape Town.
    5. Bosch, Mariano & Manacorda, Marco, 2012. "Social policies and labor market outcomes in Latin America and the Caribbean: a review of the existing evidence," LSE Research Online Documents on Economics 58003, London School of Economics and Political Science, LSE Library.
    6. 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.
    7. Armando Barrientos, 2016. "Inequality, Poverty, and Antipoverty Transfers," Working Papers id:11190, eSocialSciences.
    8. Aker,Jenny C., 2015. "Comparing cash and voucher transfers in a humanitarian context : evidence from the Democratic Republic of Congo," Policy Research Working Paper Series 7469, The World Bank.
    9. Fernando Borraz & Nicolás González, 2009. "Impact of the Uruguayan Conditional Cash Transfer Program," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 46(134), pages 243-271.
    10. Rafael Novella & Laura Ripani & Guillermo Cruces & Maria Laura Alzuá, 2012. "Conditional Cash Transfers, Female Bargaining Power and Parental Labour Supply," IDB Publications (Working Papers) 4136, Inter-American Development Bank.
    11. Ugo Gentilini, 2016. "The Other Side of the Coin," World Bank Publications, The World Bank, number 24593, July.
    12. Undurraga, Eduardo A. & Behrman, Jere R. & Leonard, William R. & Godoy, Ricardo A., 2016. "The effects of community income inequality on health: Evidence from a randomized control trial in the Bolivian Amazon," Social Science & Medicine, Elsevier, vol. 149(C), pages 66-75.
    13. World Bank Group, 2016. "Cash Transfers in Humanitarian Contexts," World Bank Other Operational Studies 24699, The World Bank.

    More about this item

    Keywords

    Adult Work Incentives; Cash Transfers; Consumption; Difference-in-Differences; In-Kind Transfers; Mexico; Poverty Measures; PAL; Randomized design.;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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