Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/326847 
Year of Publication: 
2022
Series/Report no.: 
UNU-MERIT Working Papers No. 2022-038
Publisher: 
United Nations University (UNU), Maastricht Economic and Social Research Institute on Innovation and Technology (UNU-MERIT), Maastricht
Abstract: 
The effectiveness of cash transfer programs to foster social mobility in the medium and long run is still unclear. Using a RDD we found that after six years of exposure to the Ecuadorean cash transfer, living conditions of beneficiaries are worse off than non-beneficiaries. We argue that it is the mechanism to evaluate continuity that incentivizes households to remain poor. Continuity is evaluated every 4-6 years based solely on a proxy-means score and not on whether households are on a path towards escaping poverty. Furthermore, households do not know how the score pis estimated and their proximity to the cutoff. This creates uncertainty on the side of beneficiaries, who take long-term suboptimal decisions to maximize their short-term utility. We also estimate the effect of the old-age pension's branch of the program, whose beneficiaries do not face uncertainty about their continuity, finding no negative effects for that branch.
Subjects: 
cash transfer
program design
long-term impact
proxy-means-test
Ecuador
JEL: 
I38
H53
C14
D81
Creative Commons License: 
cc-by-nc-sa Logo
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.