Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/289928 
Year of Publication: 
2023
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-1412
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
We exploit an expansion in social protection to middle-income households to provide evidence on how middle-income households cope with economic shocks and how to build their resilience. We use a regression discontinuity design around the eligibility cutoff for a program that delivered monthly cash transfers mainly through bank accounts in Colombia. We find no impacts on food security, education, and health outcomes-the target outcomes of antipoverty programs. In contrast, program eligibility increases non-food consumption and reduces debt for routine expenses. Bank account ownership increases by 16%, and beneficiaries are more likely to borrow from formal lenders. Amid systemic and idiosyncratic shocks, the program prevents middle-income households from reducing non-food spending and acquiring debt for routine expenses. Moreover, when hit by severe shocks, beneficiary households substitute away from predatory loans. The results suggest that middleincome households are constrained by lack of insurance and that social protection can build middle-income households' resilience to shocks through both cash transfers and by integrating beneficiaries into formal credit markets.
Subjects: 
Basic income
Insurance
Cash transfers
JEL: 
I18
I38
O15
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.