Spending, Saving and Public Transfers Paid to Women

PWP-CCPR-2004-024

Abstract

The literature suggests men and women have different preferences. This paper exploits 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. In an effort to disentangle the effect of additional income in the household from the effect of changing the distribution of income within the household, the impact of PROGRESA income is compared with all other income sources. In addition to spending on food, clothing and education, savings and investment decisions are examined. Additional money in the hands of women is spent on child goods (particularly clothing), improved nutrition (better quality diets) and investments in small livestock (which are traditionally managed and cared for by women). Among single headed households, PROGRESA income is not treated differently from other income. We conclude that not only do preferences of men and women differ but, among poor, rural Mexican households, resources under the control of women are more likely to be spent on investments for the future than resources that men control.