THE EFFECT OF UNIVERSAL CHILD BENEFIT ON HOUSEHOLD EXPENDITURE: CASE OF MONGOLIA

This study investigates the causal impact of Mongolia’s universal child benefit program on household expenditure using PSM with DID approach. In addition, we focused on the how households spend their benefit income. To examine the relationship between benefit income and household expenditures, we use SUR model. We use cross-sectional data from the Integrated Household Income and Expenditure Survey with Living Standards Measurement Survey of 2002/2003 and Household Socio-Economic Survey of 2007/2008 from the NSO of Mongolia. We find that the effects of UCBP on household expenditures depending on household behavior. For households involved in agriculture, households receiving benefit income increased more their expenditures on non-durable goods than food and durable goods. Contrary, households not involved in agriculture, they increased their expenditures on food items than durable and non-durable goods. For the low and middle-income group, there are positive UCBP effects on the broad variety of food and non-durable expenditure categories. However, there have been almost no significant effects of UCBP on the expenditures for the high-income group. In addition, we find that the income transfers are shared between children and their parents.