Investing cash transfers to raise long term living standards

By Paul J. Gertler, Sebastian Martinez, Marta Rubio-Codina. 2006

578 citations recorded by the source corpus.

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.

Subfields: Nutrition and Dietetics, Safety Research, Soil Science

View Paper: https://www.semanticscholar.org/paper/a34feee5c0bad56273c741d0e2b85aabb5d0416a

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Nutrition and Dietetics

In Safety Research

In Soil Science

Citations in the corpus

Indirect Effects of an Aid Program: How Do Cash Transfers Affect Ineligibles' Consumption? (2009, unknown): “For every 200 pesos transferred each month, the recipient consumes 176 pesos (Gertler et al., 2006).”
Efficient Responses to Targeted Cash Transfers (2013, unknown): “The fact that the increase in total consumption is below the amount of the grant has been noted and interpreted by Gertler, Martinez, and Rubio-Codina ð2012Þ, who present 10 Notice that this is different from the absence of spillover effects on individuals not receiving the transfer.”
Forest Conservation and Slippage: Evidence from Mexico’s National Payments for Ecosystem Services Program (2012, background): “15 Evidence from evaluations of Progresa suggests that this is the case (Gertler, Martinez, and Rubio-Codina 2006). in areas that have high transportation costs and thus localized markets.”
The Ecological Footprint of Poverty Alleviation: Evidence from Mexico's Oportunidades Program (2010, unknown): “…question using the Progresa data, we examine the extent to which nonrecipient households 15 This result would seem to contradict the findings of Gertler, Martinez, and Rubio-Codina (2006), who show that recipient households do invest a small portion of Oportunidades transfers in livestock and…”
From protection to production: productive impacts of the Malawi Social Cash Transfer scheme (2012, background): “(2010) find that the programme increases the value and variety of food consumed from own production and increases land use, livestock ownership and crop spending while Gertler et al. (2006) note that the programme is associated with increased land use and animal ownership as well as a greater likeli”
Stimulating managerial capital in emerging markets: the impact of business training for young entrepreneurs (2013, background): “Karlan and Valdivia (2011) use a randomised control trial to evaluate the impact of business training sessions over a period of 1–2 years on business outcomes for female micro-entrepreneurs in Peru.”