come from the 2005 _Encuesta Nacional de Hogares sobre Medicion de Vida_ (EMNV) developed by the Nicaraguan National Institute of Statistics (INEC). The Survey is stratified, nationally representative, and collects information on general attributes of the entire population. The sample includes 6,861 observations representative of a population of close to 1 million households. The data provide information about participation of individuals in the following associations; i) local committees: group of individuals in a neighborhood (or village) that advocate to local government in order to attend the concerns and needs of the community (such as improving public services or monitoring spending); ii) professional associations: group of individuals that unite to promote common interests to their profession or sector of employment; iii) credit unions: institutions that provide financial services to its members/shareholders; and iv) other type of associations, such as religious groups, fraternities, and clubs. In this paper, we will only analyze the signaling impact of local committees, professional associations, and credit unions as they seek to obtain tangible economic benefits on behalf of their members. For simplicity, we refer to them as productive associations. Of course, when analyzing the influence of productive association in credit outcomes, we exclude credit unions from the analysis since the main purpose of credit unions is to provide credit services to their members. Our objective is then to disentangle the “signaling effect” of associations in outcomes (i.e. access to credit and social programs) from the effect in outcomes that may arise from the nature of the association).

Table 1 provides descriptive statistics on participation in associations. Columns 1 through 5 display the share of households having a head with at least one member participating in productive and non-productive associations. Column 1 indicates that nationally about 6.4% of all households have at least one member participating in a productive association, the majority of which reside in rural areas (11% in rural areas vs. 6% in urban areas). Columns 2, 3, and 4 display respectively the share of households participating in local committees, credit unions, and professional associations by regions and socio-economic group. Similarly to what occurs nationally, participation in local committees and in professional associations is higher in rural areas and among the nonpoor. Household participation in credit unions is larger in urban areas. Column 5 presents the share of households having at least one member participating in non-productive associations, mainly churches and clubs.

Table 2 provides descriptive statistics on access to social programs and credit. The 2005 EMNV includes a module that gathers information on whether or not households benefited from social programs. Out of a list of 23 programs, we identified 2 social assistance programs that provide free or subsidized assets to promote investment among the poor: agricultural programs and housing programs. Agricultural programs include information on three ongoing programs in Nicaragua: _libra por libra_ , _huertos caseros_ , and the _forestation_ programs. Data do not permit to analyze each program independently. These programs provide households working in agriculture with some type of investment asset; such as improved seeds, plants, and trees. Housing programs provide households with land, labor, and/or materials to build or remodel their dwelling. Columns 1 and 2 in Table 2 display the share of households benefiting from the aforementioned programs. Descriptive statistics indicate that only about 3 (1) percent of all households claim to have benefited from agricultural (housing) programs; most of