Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/236483 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14452
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We study how 3,534 beneficiaries of PROSPERA, Mexico's cash transfer program, smooth food consumption around the transfer payday, an anticipated and transitory income shock. We find that food consumption and food security do not change around the transfer payday, including for recipients with impatient or time-inconsistent preferences and households with higher than median transfer dependence. Conversely, health and employment shocks (unexpected and less transitory income changes) reduce food security. The transfer's relative illiquidity may act as a commitment device, helping time-inconsistent and less experienced debit card holders smooth consumption.
Subjects: 
consumption smoothing
permanent income hypothesis
payday
JEL: 
D12
D91
E21
I12
I38
Document Type: 
Working Paper

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