Using data from a randomized experiment, we find that poor rural Mexican households invested part of their cash transfers from the Oportunidades program in productive assets, increasing agricultural income by almost 10 percent after 18 months of benefits. We estimate that for each peso transferred, households consume 74 cents and invest the rest, permanently increasing long-term consumption by about 1.6 cents. Results suggest that cash transfers can achieve long-term increases in consumption through investment in productive activities, thereby permitting beneficiary households to attain higher living standards that are sustained even after transitioning off the program.
Authors
Research Associate
Marta is a Research Associate, working at the Centre for Evaluation of Development Policies at IFS and at the Inter-American Development.
UC Berkeley
Sebastian Martinez
Journal article details
- Publisher
- Institute for Fiscal Studies
- JEL
- D14, H23, I38, O12
- Issue
- October 2011
Suggested citation
P, Gertler and S, Martinez and M, Rubio Codina. (2011). 'Investing cash transfers to raise long term living standards' (2011)
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