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Altruism, Exchange and Crowding Out of Private Support to the Elderly: Evidence from a Demogrant in Mexico

Laura Juarez ()

No 707, Working Papers from Centro de Investigacion Economica, ITAM

Abstract: This paper uses a recent demogrant for the elderly in Mexico City to estimate the e¤ect of an exogenous increase in the income of older individuals on the amount of private transfers they receive. My results show that not controlling for the endogeneity of income replicates the positive or small negative e¤ects of income on the amount of private transfers received obtained by previous work. In contrast, my instrumental variables strategy yields negative and signi.cant income e¤ects, not far from the minus one implied by altruistic models, suggesting that a change in the public resources for elderly could be neutralized by the response of private transfers.

Pages: 27 pages
Date: 2007-11
New Economics Papers: this item is included in nep-age, nep-cbe, nep-edu and nep-soc
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