Income Effect on Labor Outcomes for People Living in Poverty: the case of PROGRESA

Juliana Mesén Vargas

No 2018015, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: This paper studies the income effect of cash transfers on adult labor outcomes. I use data of PROGRESA, a large cash transfer program in Mexico that provides money to households subject to the condition that school aged kids go to school. I focus on a subsample of the eligibles for whom the conditionality is not a constraint. This allows me to shut-down the substitution effect that the conditionality of the transfer may induce. In practice, it is as if PROGRESA was an unconditional cash transfer for this subpopulation. Contrary to standard beliefs, I find that the income effect on labor outcomes is not negative.

Keywords: Conditional Cash Transfers; Poverty; Labor Supply (search for similar items in EconPapers)
JEL-codes: C93 I32 J22 O12 (search for similar items in EconPapers)
Date: 2018-11-21
New Economics Papers: this item is included in nep-dev and nep-lma
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2018015

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