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Control of resources, bargaining power and the demand of food: Evidence from PROGRESA

Denni Tommasi

Journal of Economic Behavior & Organization, 2019, vol. 161, issue C, 265-286

Abstract: I use a structural model of households to recover how much resources each individual controls in the context of the Mexican PROGRESA program. I find that the eligibility to receive the cash transfers induces a redistribution of resources from the father to both the mother and children, although the mother is the one benefiting the most. With these information I compute individual poverty rates and quantify to what extent the program reduces within-household inequality. I also combine these measures to construct a proxy for women’s bargaining power and, using causal identification techniques, I estimate its direct effects on household demand for food. Exploiting random assignment of the cash transfers as an instrumental variable for the treatment of interest, I show that mothers having majority control of household resources relative to fathers increase food consumption as a share of the household budget by 6.5–8.3%. I use these estimates to argue that, by knowing (i) The distribution of pre-program resources inside the household, and (ii) How much influence each decision maker can have on the desired policy outcome, a policymaker can improve the cost-effectiveness of a cash transfer program by targeting the cash to resource shares in addition to gender.

Keywords: Cash transfers; PROGRESA; Structural model; Collective model; Resource shares; Poverty; Causality; LATE; Engel curves; Food (search for similar items in EconPapers)
JEL-codes: D13 D11 D12 C31 I32 (search for similar items in EconPapers)
Date: 2019
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