Abstract
We analyze how peers affect the participation in a family allowance for poor families in Chile called Subsidio Unico Familiar (SUF) using a regression discontinuity design. To identify the spillovers effect, we exploit variation in the information about social programs due to a home-visitation program for families in extreme poverty introduced in 2002 called Chile Solidario (CS). Conditional on an index of wealth, eligibility to receive the home-visits are random around municipality level cutoffs. We find that not only individual participation in CS increases the take-up of SUF, but that participation in SUF also responds to neighbors' participation in CS. In particular, we estimate network effects on participation in social programs of about .5. To put this figure in context, if neighbors' participation in SUF increases by 3.7pp, then the participation of the household increases by 1.5pp. To understand the mechanisms through which peer effects operate, we allow for heterogeneity for different types of networks.
Invited by: Giuseppe Cavaliere
Local Organizer: Massimiliano Onorato