Investing Cash Transfers to Raise Long-Term Living Standards

The authors test whether poor households use cash transfers to invest in income generating activities that they otherwise would not have been able to do. Using data from a controlled randomized experiment, they find that transfers from the Oportunidades program to households in rural Mexico resulted...

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Main Authors:	Gertler, Paul, Martinez, Sebastian, Rubio-Codina, Marta
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2012
Subjects:	AGRICULTURE ASSETS CAPITA CONSUMPTION COMMUNITY LEVEL CONSUMPTION DATA CONSUMPTION LEVEL CONSUMPTION LEVELS CONSUMPTION MODEL ECONOMIC SURVEY FIXED COSTS HOUSEHOLD CONSUMPTION HOUSEHOLD SIZE HUMAN CAPITAL INCOME INCOME DATA LAND USE LIQUIDITY LIVING STANDARDS
Online Access:	http://documents.worldbank.org/curated/en/2006/08/6984762/investing-cash-transfers-raise-long-term-living-standards http://hdl.handle.net/10986/9293

id	okr-10986-9293
recordtype	oai_dc
spelling	okr-10986-92932021-04-23T14:02:41Z Investing Cash Transfers to Raise Long-Term Living Standards Gertler, Paul Martinez, Sebastian Rubio-Codina, Marta AGRICULTURE ASSETS CAPITA CONSUMPTION COMMUNITY LEVEL CONSUMPTION DATA CONSUMPTION LEVEL CONSUMPTION LEVELS CONSUMPTION MODEL ECONOMIC SURVEY FIXED COSTS HOUSEHOLD CONSUMPTION HOUSEHOLD SIZE HUMAN CAPITAL INCOME INCOME DATA LAND USE LIQUIDITY LIVING STANDARDS The authors test whether poor households use cash transfers to invest in income generating activities that they otherwise would not have been able to do. Using data from a controlled randomized experiment, they find that transfers from the Oportunidades program to households in rural Mexico resulted in increased investment in micro-enterprise and agricultural activities. For each peso transferred, beneficiary households used 88 cents to purchase consumption goods and services, and invested the rest. The investments improved the household's ability to generate income with an estimated rate of return of 17.55 percent, suggesting that these households were both liquidity and credit constrained. By investing transfers to raise income, beneficiary households were able to increase their consumption by 34 percent after five and a half years in the program. The results suggest that cash transfers to the poor may raise long-term living standards, which are maintained after program benefits end. 2012-06-26T20:57:06Z 2012-06-26T20:57:06Z 2006-08 http://documents.worldbank.org/curated/en/2006/08/6984762/investing-cash-transfers-raise-long-term-living-standards http://hdl.handle.net/10986/9293 English en_US Policy Research Working Paper; No. 3994 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Mexico
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	AGRICULTURE ASSETS CAPITA CONSUMPTION COMMUNITY LEVEL CONSUMPTION DATA CONSUMPTION LEVEL CONSUMPTION LEVELS CONSUMPTION MODEL ECONOMIC SURVEY FIXED COSTS HOUSEHOLD CONSUMPTION HOUSEHOLD SIZE HUMAN CAPITAL INCOME INCOME DATA LAND USE LIQUIDITY LIVING STANDARDS
spellingShingle	AGRICULTURE ASSETS CAPITA CONSUMPTION COMMUNITY LEVEL CONSUMPTION DATA CONSUMPTION LEVEL CONSUMPTION LEVELS CONSUMPTION MODEL ECONOMIC SURVEY FIXED COSTS HOUSEHOLD CONSUMPTION HOUSEHOLD SIZE HUMAN CAPITAL INCOME INCOME DATA LAND USE LIQUIDITY LIVING STANDARDS Gertler, Paul Martinez, Sebastian Rubio-Codina, Marta Investing Cash Transfers to Raise Long-Term Living Standards
geographic_facet	Latin America & Caribbean Mexico
relation	Policy Research Working Paper; No. 3994
description	The authors test whether poor households use cash transfers to invest in income generating activities that they otherwise would not have been able to do. Using data from a controlled randomized experiment, they find that transfers from the Oportunidades program to households in rural Mexico resulted in increased investment in micro-enterprise and agricultural activities. For each peso transferred, beneficiary households used 88 cents to purchase consumption goods and services, and invested the rest. The investments improved the household's ability to generate income with an estimated rate of return of 17.55 percent, suggesting that these households were both liquidity and credit constrained. By investing transfers to raise income, beneficiary households were able to increase their consumption by 34 percent after five and a half years in the program. The results suggest that cash transfers to the poor may raise long-term living standards, which are maintained after program benefits end.
format	Publications & Research :: Policy Research Working Paper
author	Gertler, Paul Martinez, Sebastian Rubio-Codina, Marta
author_facet	Gertler, Paul Martinez, Sebastian Rubio-Codina, Marta
author_sort	Gertler, Paul
title	Investing Cash Transfers to Raise Long-Term Living Standards
title_short	Investing Cash Transfers to Raise Long-Term Living Standards
title_full	Investing Cash Transfers to Raise Long-Term Living Standards
title_fullStr	Investing Cash Transfers to Raise Long-Term Living Standards
title_full_unstemmed	Investing Cash Transfers to Raise Long-Term Living Standards
title_sort	investing cash transfers to raise long-term living standards
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/08/6984762/investing-cash-transfers-raise-long-term-living-standards http://hdl.handle.net/10986/9293
_version_	1764406423375052800

Investing Cash Transfers to Raise Long-Term Living Standards

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