Andrea Flores, FGV – Brasil

Paper: Are Cash Transfers Effective at Empowering Mothers? A Structural Evaluation of Mexico’s Oportunidades

Abstract: This paper develops and structurally estimates a collective family labor supply model with home production exploiting the exogenous variation of Mexico’s Oportunidades conditional cash transfer program on the time and consumption allocations within urban households. Using the structural estimates for intrahousehold bargaining power and parental preferences, the paper shows that participation in Oportunidades significantly increased mothers’ bargaining power within the household, which is associated with a significant increase in the domestic production of a child-related public good. Counterfactual exercises show that Oportunidades is as effective as alternative cash transfer programs and more effective than wage subsidies at increasing mothers’ bargaining power, control over household monetary resources, and domestic output.