Household Responses to Cash Transfers

Bram De Rock, Tom Potoms and Denni Tommasi

No 2017-38, Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: This paper exploits the experimental set-up of the cash transfer program PROGRESA in rural Mexico to estimate a collective model of the household in order to investigate how parents allocate household resources. We show that household decisions are compatible with the collective model at the beginning of the program, but reject it later on. This shows that second order effects of cash transfer programs are important and suggests we need richer structural models to thoroughly analyse these policy interventions. We end this paper by proposing such a simple and tractable model of household behaviour, where decision makers may have misaligned preferences as a result of the treatment about the importance of a public good.

Keywords: collective model; bargaining power; efficiency; PROGRESA; conditional cash transfers (search for similar items in EconPapers)
JEL-codes: D13 I38 J12 J16 O15 (search for similar items in EconPapers)
Pages: 35 p.
Date: 2017-10
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Household Responses to cash Transfers (2016)
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