Old-Age Government Transfers and the Crowding Out of Private Gifts: The 70 and Above Program for the Rural Elderly in Mexico

40 Pages Posted: 15 Dec 2013

See all articles by Catalina Amuedo-Dorantes

Catalina Amuedo-Dorantes

San Diego State University - Department of Economics; IZA Institute of Labor Economics

Laura Juarez

Bank of Mexico

Abstract

We estimate the crowding out of private transfers caused by 70 y Más – a public assistance program for the rural elderly in Mexico for whom family support is an important source of income. Using data from the Mexican Income and Expenditure Survey and a triple difference approach, we find that the program crowds out private gifts by 37 percent, and it does so mostly by reducing the probability of receiving domestic remittances. As a result, the non-labor income of beneficiaries increases by less than their government transfers. Thus, by reducing their private support to the elderly, domestic donors are dampening the effect of the program, although not completely neutralizing it.

Keywords: old-age government transfers, crowding-out, remittances, Mexico

JEL Classification: H3, H55, J14, J18

Suggested Citation

Amuedo-Dorantes, Catalina and Juarez, Laura, Old-Age Government Transfers and the Crowding Out of Private Gifts: The 70 and Above Program for the Rural Elderly in Mexico. IZA Discussion Paper No. 7786. Available at SSRN: https://ssrn.com/abstract=2367641

Catalina Amuedo-Dorantes (Contact Author)

San Diego State University - Department of Economics ( email )

5500 Campanile Drive
San Diego, CA 92182
United States
619-594-1663 (Phone)
619-594-5062 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Laura Juarez

Bank of Mexico ( email )

No Address Available

Register to save articles to
your library

Register

Paper statistics

Downloads
26
Abstract Views
1,580
PlumX Metrics