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Strategic complementarities and social transfers: how do PROGRESA payments impact nonbeneficiaries?

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  • Armando Barrientos
  • Rachel Sabates-Wheeler

Abstract

The article examines local economy effects of social transfers by focusing on food consumption and asset holdings of noneligible households in rural Mexico following the introduction of Programa de Educacion, Salud y Alimentacion (PROGRESA) in 1997. The quasi experimental nature of the evaluation data collected for the purposes of evaluating the impact of PROGRESA enables comparison of welfare indicators among noneligible households in treatment areas and control areas. The analysis finds that noneligible households in treatment areas show significantly higher levels of food consumption and asset holdings following the introduction of PROGRESA, compared to noneligible households in control areas. These results are interpreted to suggest that transfers in poor rural areas in Mexico enable agents to interact more strategically such that nonbeneficiaries, as well as beneficiaries, reap consumption and production advantages.

Suggested Citation

  • Armando Barrientos & Rachel Sabates-Wheeler, 2011. "Strategic complementarities and social transfers: how do PROGRESA payments impact nonbeneficiaries?," Applied Economics, Taylor & Francis Journals, vol. 43(23), pages 3175-3185.
    • Handle: RePEc:taf:applec:v:43:y:2011:i:23:p:3175-3185
    DOI: 10.1080/00036840903493259
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    References listed on IDEAS

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    1. Cesar Martinelli & Susan W. Parker, 2003. "Do School Subsidies Promote Human Capital Accumulation among the Poor?," Working Papers 0306, Centro de Investigacion Economica, ITAM.
    2. Angelucci, Manuela & De Giorgi, Giacomo, 2006. "Indirect Effects of an Aid Program: The Case of Progresa and Consumption," IZA Discussion Papers 1955, Institute of Labor Economics (IZA).
    3. Morley, Samuel & David Coady, 2003. "From Social Assistance to Social Development: Targeted Education Subsidies in Developing Countries," Peterson Institute Press: All Books, Peterson Institute for International Economics, number cgd376, April.
    4. Armando Barrientos & Rachel Sabatés-Wheeler, 2009. "Do transfers generate local economy effects?," Global Development Institute Working Paper Series 10609, GDI, The University of Manchester.
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    2. Solomon Asfaw & Silvio Daidone & Benjamin Davis & Josh Dewbre & Alessandro Romeo & Paul Winters & Katia Covarrubias & Habiba Djebbari, 2012. "Analytical Framework for Evaluating the Productive Impact of Cash Transfer Programmes on Household Behaviour – Methodological Guidelines for the From Protection to Production Project," Working Papers 101, International Policy Centre for Inclusive Growth.
    3. Rougier, Eric & Combarnous, François & Fauré, Yves-André, 2018. "The “Local Economy” Effect of Social Transfers: An Empirical Assessment of the Impact of the Bolsa Família Program on Local Productive Structure and Economic Growth," World Development, Elsevier, vol. 103(C), pages 199-215.
    4. Raza, Wameq A. & Van de Poel, Ellen & Van Ourti, Tom, 2018. "Impact and spill-over effects of an asset transfer program on child undernutrition: Evidence from a randomized control trial in Bangladesh," Journal of Health Economics, Elsevier, vol. 62(C), pages 105-120.

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