Investments, Time Preferences and Public Transfers Paid to Women

Luis Rubalcava, Spectron Desarrollo S.C. and Centro de Investigación y Docencia Económicas (CIDE)
Graciela M. Teruel, University of California, Los Angeles and Universidad Iberoamericana
Duncan Thomas, Duke University

The literature suggests men and women may have different preferences. New data are used to investigate this issue by examining savings, investments and inter-temporal preferences. We use a random assignment social experiment in which women in treatment households were given a large public cash transfer (PROGRESA) and women in control households were given nothing. Income elasticities from PROGRESA are compared with income elasticities from all other income sources. Additional money in the hands of women is spent on small livestock (which are traditionally managed for by women), improved nutrition and on child goods (particularly clothing). Among single-headed households, PROGRESA income elasticities are the same as other income elasticities. Direct evidence on inter-temporal preferences gathered in the Mexican Family Live Survey indicates that women are more patient than men. Taken together, the results suggest that PROGRESA income results in a shift in the balance of power within households and women allocate more resources towards investments in the future.

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Presented in Session 76: Family Economic Relations