Economics Dept., University of Arizona

   McClelland Hall 401

   Tucson, AZ 85721-0108

   angelucm@eller.arizona.edu

Selected Papers

Indirect Effects of an Aid Program: How do Cash Injections Affect Ineligibles' Consumption?, with Giacomo De Giorgi, American Economic Review, forthcoming. Here is the Appendix .

We exploit the unique experimental design of a social program to understand how cash transfers to eligible households indirectly affect the consumption of non-eligible households living in the same villages. This indirect effect on consumption is positive, and it operates through insurance and credit markets: non-eligible households benefit from their neighbors' higher income by receiving more transfers, by borrowing more, and by reducing their precautionary savings. This exercise shows 1) how social programs may benefit the local economy at large, not only the treated; 2) how this beneficial effect is spread in the locality through informal credit and insurance arrangements; 3) how looking only at the effect on the treated results in an underestimation of the program impact. One should analyze the effects of this type of program on the entire local economy, rather than on the treated only, and use a village-level randomization, rather than selecting treatment and control subjects from the same community.
 

Oportunidades: program effects on consumption, low participation, and methodological issues, with O. Attanasio, Economic Development and Cultural Change, forthcoming (new version: 5/15/2007)

In this paper we estimate the effect of the Mexican conditional cash transfer program, Oportunidades, on consumption, and we explore some issues related to participation into the program and to the estimation of AIT and ATT effects. We discuss the comparability of treatment and control areas, provide evidence that the expected transfer may not be sufficiently high to induce many eligible households to participate, and find positive effects on consumption.
 

Love on the rocks: alcohol abuse and domestic violence in rural Mexico, revised and resumbitted to the B.E Journal of Economic Analysis and Policy

What causes alcohol abuse and domestic violence and how can we stop them? These behaviors have multiple determinants, making the effects of changes in wife's and husband's income ambiguous. This paper estimates the effects of exogenous changes in wife's and husband's income on husband alcohol abuse and alcohol-induced violence using new data from rural Mexico. A long-lasting 20 dollar monthly increase in wife income decreases husbands' alcohol abuse by 15% and aggressive behavior by 21%; the extra money increases the wife's freedom and security, is spent on individual and household goods, and it crowds out transfers from the husband only for 5% of the wives whose income increases. Alcohol abuse and violence are insensitive to short-term fluctuations in husband's income. These findings suggest that the wife uses her higher income to reduce the consumption of goods that lower her utility, that alcohol abuse responds more to changes in permanent than in temporary income, and that targeting women as recipients of micro-credit or of other welfare programs may have beneficial effects in reducing alcohol dependence and domestic violence.

Family networks and school enrollment: evidence from a randomized social experiment, with G. De Giorgi, M. Rangel, and I. Rasul

We present evidence on whether and how a household’s behavior is influenced by the presence and characteristics of its extended family. Using household panel data from the Progresa social assistance program in rural Mexico, we first exploit information on the paternal and maternal surnames of heads and spouses in conjunction with the patronymic naming convention to identify the inter and intra generational family links of each household to others in the same village. We then exploit the randomized research design of the Progresa evaluation data to identify whether the treatment effects of Progresa transfers on secondary school enrolment vary according to the presence and characteristics of extended family members. We find that Progresa only raises secondary enrolment among households that are embedded in an extended family network. Eligible but isolated households do not respond. The key mechanism through which the extended family influences household schooling choices relates to the redistribution of resources within the family network towards those households on the margin of enrolling children into secondary school.
 

U.S. Border Enforcement and the Net Flow of Mexican Illegal Migration

This paper investigates the effect of U.S. border enforcement on the net flow of Mexican undocumented migration. It shows how this effect is theoretically ambiguous, given that increases in border controls deter prospective migrants from crossing the border illegally, but lengthen the duration of current illegal migrations. It then estimates the impact of enforcement on 1972-1993 migration net flows by merging aggregate enforcement data with micro data on potential and current illegal Mexican migrants. The econometric model accounts for the endogeneity of border controls using the Drug Enforcement Administration budget as an instrumental variable. Both the inflow and outflow of illegal Mexican migration are highly sensitive to changes in border enforcement. The estimates of the enforcement overall effect on illegal migration's net flow range across different specifications, from a decline - about 35% of the size of the effect on the inflow - to an increase. Thus, they suggest that border enforcement may not be an effective means to reduce the level of the illegal alien population in the United States.

Estimating ATT effects with non-experimental data and low compliance, with O. Attanasio

In this paper we discuss several methodological issues related to the identification and estimation of Average Treatment on the Treated (ATT) effects when dealing with non-experimental data. The sample design we consider consists of a treatment group, where a program is implemented, and a control group that is non-randomly drawn, where the program is not offered. Moreover, as it is often the case, we consider situations where program take-up is relatively low. Estimating the ATT, therefore, involves tackling both the non-random assignment of the program and the non-random participation among treated individuals. We argue against standard matching approaches to deal with the latter issue because they are based on the assumption that we observe all variables that determine participation and outcome. Instead, we propose an IV-type estimator which exploits the fact that the ATT can be expressed as the Average Intent to Treat divided by the participation share, in the absence of spillover effects. We propose a semi-parametric estimator that couples the flexibility of matching estimators with a standard Instrumental Variable approach. We discuss the different assumptions necessary for the identification of the ATT with each of the two approaches, and we provide an empirical application by estimating the effect of the Mexican conditional cash transfer program, Oportunidades, on food consumption.
 

Aid programs' unintended effects: the case of Progresa and migration

This paper analyzes the effect of aid on international and domestic migration and explores the causal effect of income on migration. The theoretical model predicts that the effect of aid on migration is ambiguous, depending on both the size and type of transfers. For some household types, e.g. those that are credit constrained, conditional transfers, where the potential recipient has to comply with some requirement in order to qualify for eligibility, may decrease contemporaneous migration but increase future migration. In contrast, unconditional grants may increase the level of migration at all times. Randomized data from a Mexican development program, Progresa, are used to test these hypotheses. The empirical analysis verifies that unconditional transfers increase current migration, while conditional transfers reduce it. Overall, the program generates an increase in international migration but no change in domestic migration.