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Federico Tagliati

I am an applied microeconomist with a focus on development economics. In my research I combine the use of experimental data with structural estimation methods to evaluate the effects of different types of policy interventions. In my job market paper, I study the effects of in-kind and cash transfer programs on the welfare of the recipients. In a related paper, I analyze the response of child labour and schooling to the provision of in-kind and cash benefits. In ongoing research, I study how parental investments and quality of teaching affect young children's school achievements.

I am also working on the design and evaluation of a policy intervention aiming at increasing the employment of young people in Macedonia through the provision of wages subsidies to the employers.

  • Primary fields: Development and Applied Microeconomics
  • Secondary field: Experimental Economics

"Welfare Effects of An In-kind Transfer Program: Evidence from Mexico"

Abstract

In this paper, I study the effects of in-kind versus cash transfers on the welfare of poor households in rural Mexico. Using data from a governmental program which randomly transferred either a food basket or cash, I determine which policy was more efficient at a given cost to the government. On one hand, the government paid a procurement price for the food basket which was significantly lower than the retail price of the basket paid by a recipient. This price wedge made the market value of the in-kind transfer larger than a cash transfer of equal cost to the government. On the other hand, the recipient's welfare under this in-kind transfer depends on the extent to which the transfer is distorting. I estimate a quadratic almost ideal demand system for food and use it to simulate the recipient's welfare under these two alternative transfer schemes. To account for the distorting effect of the in-kind subsidy, I compute the shadow prices at which the recipient would optimally consume the subsidized food basket. I then use these shadow prices to compute a distribution for the willingness to pay for in-kind benefits within the sample. My results suggest that recipients valued the in-kind transfer at 78 percent of its face value. This distorting effect of the in-kind transfer perfectly offsets the wedge in the values of the two transfers, making them equally cost-efficient from the government's perspective. Moreover, I study how the welfare effects of the in-kind program are distributed across the population of recipients. One important result is that in-kind transfers have a regressive effect: they are more valuable to recipients who are relatively better off.

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