Cash Transfer Programs for Older Persons: Effects on Obesity

Background: Cash transfer programs targeting older people intend to ameliorate their poverty, but might have side effects on different aspects of the lives of their beneficiaries, such as nutrition and obesity. Knowing those effects is policy relevant for countries with high levels of obesity and broad use of cash transfer programs, like Mexico. The economic theory describes the relationship between income and weight as inverted U-shaped: at low-income levels, more income translates into higher obesity, while at higher-income levels, it increases the demand of healthy food and decreases weight. This study addresses the effects on BMI and obesity of two cash transfer programs targeting the elderly and tests the economic theory of the U-inverted relationship between income and weight.

Methods: We use Reconocer, a cash transfer experiment designed by RAND in the state of Yucatan, Mexico, for residents 70 years and older to evaluate obesity impacts of additional monthly income relative to other cash transfer program, 70 y mas, from the Mexican federal government that targets residents 70 years and older in smaller localities providing a bimonthly income. Two cities in the state of Yucatan, Valladolid (treatment) and Motul (control), were selected for the RAND cash transfer experiment. Elderly residents of Valladolid were provided the equivalent of an additional $70.20 per month, a 44% increase in average household income. Data were collected in both cities before, and 6 and 18 months after the cash transfer started about aspects of overall well-being. Surveys collected self-reported data on health, biomarkers, and income. Anthropometric measurements for every age-eligible respondent including height, weight, and knee height were collected by trained personnel. 70 y mas started seven months after Reconocer and provided $127.80 bimonthly to the elderly in Motul, the control city. To tests the effects we used simple difference-in-differences models, difference-in-differences with covariates, and logits with covariates.

Results: There is evidence about the influence of the monthly program on reducing the proportion of anemic people in the short-run, but in the medium term it increases the BMI and reduces the prevalence of normal weight among its beneficiaries relative to the bimonthly pension. When analyzed by tercile of income and poverty level, there are only two effects on weight-related outcomes: an increase in BMI and a decrease in the prevalence of normal weight among lower-income people. This lack of significant effects by absolute and relative income levels among the other weight-related outcomes may provide evidence supporting the theory of the inverted U-shape.

Conclusion: This study finds evidence that monthly cash transfers to the elderly in the short-run reduce their anemia, and in the medium term it slightly increases their BMI, but do not significantly affect their obesity levels relative to a bimonthly cash transfer program. Furthermore, these effects are larger among lower-income people. Findings may suggest that monthly cash transfer programs are a valuable policy that could be implemented among similar vulnerable populations without risking their nutrition.