Cash Transfer Programs with Income Multipliers: PROCAMPO in Mexico

By E. Sadoulet, A. de Janvry, B. Davis. 2001

288 citations recorded by the source corpus.

Abstract Cash transfer programs create multiplier effects when recipients put the money they receive to work to generate further incomes. When this is the case, the ultimate income effects are multiples of the amounts transferred. We analyze the PROCAMPO program in Mexico that was introduced to compensate farmers for the anticipated negative effect of NAFTA on the prices of basic crops. The transfer rules and the timing of the panel data collected allow unique control of biases in this impact analysis. We find that the multiplier among ejido sector recipients is in the range 1.5–2.6. Multipliers are higher for households with medium and large farms, low numbers of adults in the household, nonindigenous backgrounds, and located in the Center and Gulf regions. High multipliers reflect income opportunities that had remained unrealized due to liquidity constraints that are relaxed by the transfers. Opportunities come from the asset endowments that these households received through the land reform, particularly irrigated land, and they are enhanced by access to technical assistance.

Subfields: Accounting, Safety Research, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/efadcbf8c3d99557154ed6118a19d8cc4468245a

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In Accounting

1. Dingqiang Sun
2. Yingheng Zhou
3. F. Yi

In Safety Research

1. Dingqiang Sun
2. Yingheng Zhou
3. F. Yi

In Sociology and Political Science

1. Dingqiang Sun
2. Yingheng Zhou
3. F. Yi

Citations in the corpus

• Grain Subsidy, Liquidity Constraints and Food security—Impact of the Grain Subsidy Program on the Grain-Sown Areas in China (2014, methodology): “, 2010), thus, liquidity constraints cause households to have underemployed and ill-allocated productive assets which could have been utilized under unconstrained condition (Sadoulet et al., 2001).”
• Rural Livelihoods in South Africa: Complexity, Vulnerability and Differentiation (2013, unknown): “Yet some evidence from Latin America suggests that state transfers support investments in productive physical capital and smallholder agriculture, generating multipliers in excess of 150 per cent of the value of the grant (Sadoulet et al. 2001).”
• Evaluating Anti-Poverty Programs (2005, unknown): “An impact evaluation of a program of compensatory cash transfers to Mexican farmers found that the transfers were partly invested, with second-round effects on future incomes (Sadoulet et al., 2001). Similarly, Ravallion and Chen (2005) found that participants in a poor-area development program in C”
• Evaluation in the Practice of Development (2008, unknown): “An impact evaluation of a program of compensatory cash transfers to Mexican farmers found that the transfers were partly invested, with second-round effects on future incomes (Sadoulet et al., 2001).”