Investing Cash Transfers to Raise Long-Term Living Standards

Paul Gertler, Sebastian Martinez and Marta Rubio-Codina
Authors registered in the RePEc Author Service: Marta Rubio Codina ()

American Economic Journal: Applied Economics, 2012, vol. 4, issue 1, 164-92

Abstract: Using data from a randomized experiment, we find that poor rural Mexican households invested part of their cash transfers from the Oportunidades program in productive assets, increasing agricultural income by almost 10 percent after 18 months of benefits. We estimate that for each peso transferred, households consume 74 cents and invest the rest, permanently increasing long-term consumption by about 1.6 cents. Results suggest that cash transfers can achieve long-term increases in consumption through investment in productive activities, thereby permitting beneficiary households to attain higher living standards that are sustained even after transitioning off the program. (JEL D14, H23, I38, O12)

JEL-codes: D14 H23 I38 O12 (search for similar items in EconPapers)
Date: 2012
Note: DOI: 10.1257/app.4.1.164
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Citations: View citations in EconPapers (192)

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