Welfare Design, Women´s Empowerment and Income Pooling

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

Although there has been a vast literature on the allocation of resources within households few studies have spoken to the issue of whether welfare policies should explicitly conceive operational rules to enhance the status of women in the family. We analyze PROGRESA, Mexico´s anti-poverty program, to investigate intra-household decisions related to specific welfare design that seeks the empowerment of women. PROGRESA states that only women are entitled to receive the program's cash transfer. We show that as the benefit in the hands of the woman increases, more resources are allocated towards girl´s and boy´s clothing and less to male clothing. Parallel, women with more power tend to allocate more resources towards what they may perceive as an improvement of the dietary condition. As PROGRESA´s transfer increases, expenditures on staple goods, such as vegetables, tortilla and beans are substituted for purchases of high protein goods (i.e., eggs and meat).