The Mixed Blessings of a Welfare Program

A new paper (abstract; PDF) by Gustavo J. Bobonis, Melissa González-Brenes, and Roberto Castro examines the effects the Mexican welfare program Oportunidades on spousal abuse:

Beneficiary women are 40 percent less likely to be victims of physical abuse, but are more likely to receive violent threats with no associated abuse. This evidence is consistent with a model of decision-makers’ interactions with asymmetric information in the male partner’s gains to marriage, who can then use threats of violence to extract rents from their female partners.

“The article may have important implications for policy, since it provide a mixed view of conditional cash transfer programs’ effectiveness in improving women’s empowerment within the household,” the authors wrote in an earlier draft. “The program may increase the likelihood of violent threats, which may in turn compromise women’s emotional health and other aspects of their wellbeing.”

In SuperFreakonomics, Levitt and Dubner wrote about another interesting research finding gleaned from Oportunidades data:

Consider the Mexican welfare program Oportunidades. To get aid, applicants have to itemize their personal possessions and house hold goods. Once an applicant is accepted, a caseworker visits his home and learns whether the applicant was telling the truth. César Martinelli and Susan W. Parker, two economists who analyzed the data from more than 100,000 Oportunidades clients, found that applicants routinely underreported certain items, including cars, trucks, video recorders, satellite TVs, and washing machines. This shouldn’t surprise anyone. People hoping to get welfare benefi ts have an incentive to make it sound like they are poorer than they truly are.

But as Martinelli and Parker discovered, applicants overreported other items: indoor plumbing, running water, a gas stove, and a concrete floor. Why on earth would welfare applicants say they had these essentials when they didn’t?

Martinelli and Parker attribute it to embarrassment. Even people who are poor enough to need welfare apparently don’t want to admit to a welfare clerk that they have a dirt floor or live without a toilet.