The effect of monthly cash transfers during five years on wealth

Andrea Molina-Vera and Hessel Oosterbeek

This paper uses an eligibility threshold to estimate the effects of receiving a (unconditional) monthly cash transfer during a period of five years on wealth. We exploit a change in eligibility criteria that took place in Ecuador in 2009. The 40th percentile of the wealth index is the program’s eligibility threshold; our results therefore apply to the richest of the poor. We find that receipt of the cash transfer has a significantly negative effect on the wealth index measured five years later (in 2014). Effect sizes are largest for women who were young or unmarried at baseline. Further results suggest that part of the effect is due to recipients being less likely to be married and therefore being less likely to have a spouse who works. This points to a potential trade-off between wealth and women being independent from their spouses. We find no effects on female labor supply or fertility

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