An impact Evaluation of Agricultural Subsidies on Human Capital Development and Poverty Reudction: Evidence from Rural Mexico

Benjamin Davisky, Sudhanshu Handa (), Marta Ruiz, Marco Stampini and Paul Winters ()
Additional contact information
Benjamin Davisky: FAO.
Sudhanshu Handa: University of North Carolina, Chapel Hill
Marta Ruiz: IMF

No 305, OVE Working Papers from Inter-American Development Bank, Office of Evaluation and Oversight (OVE)

Abstract: The Mexican Government initiated two innovative programs cash transfer schemes in the last decade: PROGRESA, which is a national anti-poverty scheme directed at chronic rural poverty, and PROCAMPO, a scheme designed to compensate farmers for the negative price effects of NAFTA. The analysis of data collected for an evaluation of PROGRESA suggests that the overall level of food consumption and health check-ups is lower among PROGRESA households that also participate in PROCAMPO. This may be due to lower outcome levels at baseline, but also because PROCAMPO households are agricultural producers and thus face a higher shadow price of time in the face of credit or labor market imperfections. In addition, PROGRESA households attain higher levels of human capital investment after only one year of program participation compared to PROCAMPO households who have been in that program for four years. And while PROCAMPO households have higher levels of investment spending, this does not lead to significantly higher levels of consumption relative to PROGRESA households. The overall conclusions are that program conditionality does influence longer-term (human capital) and medium term (productive) investment decisions, the receipt of multiple forms of treatment by beneficiaries can affect the overall impact of each individual program, and conditional transfers may have muted effects among agricultural households in the face of market imperfections.

Keywords: Cash Transfers; Agricultural Households; Mexico; Poverty. (search for similar items in EconPapers)
JEL-codes: D1 H53 I28 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2005-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: An Impact Evaluation of Agricultural Subsidies on Human Capital Development and Poverty Reduction: Evidence from Rural Mexico (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:idb:ovewps:0305

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