Local Distributional Effects of Government Cash Transfers in Chile*

Despite rapid economic growth and poverty reduction, inequality in Chile has remained high and remarkably constant over the last 20 years, prompting academic and public interest in the subject. Due to data limitations, however, research on inequality in Chile has concentrated on the national and regional levels. The impact of cash subsidies to poor households on local inequality is thus not well understood. Using poverty-mapping methods to asses this impact, we find heterogeneity in the effectiveness of regional and municipal governments in reducing inequality via poverty-reduction transfers, suggesting that alternative targeting regimes may complement current practice in aiding the poor. * We thank Chris Elbers, Berk Özler and Gabriel Demombynes for multiple clarifications and discussions regarding the methodology employed in this analysis. We are also grateful to Jason Long for programming help and to iSciences for map design and support. Finally, we are grateful for financia