Aureo De Paula (University College London)

“Spillovers in Social Programme Participation: Evidence from Chile”

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. We also study heterogeneity by proximity to the municipality’s offce and closest school, as these might proxy for participation costs. Studying heterogeneity of impacts allows us to understand the mechanisms through which peer effects operate; in particular, they suggests that neighbors are an important channel of information transmission.