Estimating the benefit incidence of an antipoverty program by propensity-score matching

We apply recent advances in propensity-score matching (PSM) to the problem of estimating the distribution of net income gains from an Argentinean workfare program. PSM has a number of attractive features in this context, including the need to allow for heterogeneous impacts, while optimally weighting observed characteristics when forming a comparison group. The average direct gain to the participant is found to be about half the gross wage. Over half of the beneficiaries are in the poorest decile nationally, and 80% are in the poorest quintile. Our PSM estimator is reasonably robust to a number of changes in methodology.