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Targeting Social Transfers to the Poor in Mexico

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  • David Coady
  • Susan Parker

Abstract

Mexico’s main social support program, Oportunidades, combines two methods to target cash to poor households: an initial self-selection by households who acquire knowledge about the program and apply for benefits, followed by an administrative determination of eligibility based on a means test. Self-selection improves targeting by excluding high-income households, while administrative targeting does so mainly by excluding middle-income households. The two methods are complementary: expanding program knowledge across households substantially increases applications from non-poor households, thus reinforcing the importance of administrative targeting. The paper shows that targeting can be further improved through redesigning the means test and differentiating transfers according to demographic characteristics.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 09/60.

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Length: 33
Date of creation: 01 Mar 2009
Date of revision:
Handle: RePEc:imf:imfwpa:09/60

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Related research

Keywords: Transfer of real resources; Social safety nets; Data analysis; probability; probabilities; equation; income groups; survey; household size; correlation; statistic; household welfare; income distribution; sample selection; household consumption; sampling; means testing; surveys; samples; household income; household survey data; household members; random sample; income levels; household survey; instrumental variable; household surveys; sample survey; probability model; significance level; representative household survey data; statistical tests; household data; regression analysis; sample ? survey; representative household; general equilibrium framework; econometrics; poverty line; regression equation; household variables; additional regressor; discriminant analysis; demand for food;

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References

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  1. David Coady, 2004. "Targeting Outcomes Redux," World Bank Research Observer, World Bank Group, vol. 19(1), pages 61-85.
  2. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  3. Blundell, Richard & Fry, Vanessa & Walker, Ian, 1987. "Modelling the Take-up of Means-tested Benefits: the Case of Housing Benefits in the United Kingdom," Economic Journal, Royal Economic Society, vol. 98(390), pages 58-74, Supplemen.
  4. David Coady, 2006. "The Welfare Returns to Finer Targeting: The Case of The Progresa Program in Mexico," International Tax and Public Finance, Springer, vol. 13(2), pages 217-239, May.
  5. David Coady & Margaret Grosh & John Hoddinott, 2004. "Targeting of Transfers in Developing Countries : Review of Lessons and Experience," World Bank Publications, The World Bank, number 14902, October.
  6. Heckman, James J & Smith, Jeffrey A., 2003. "The determinants of participation in a social program: Evidence from a prototypical job training program," Working Paper Series 2003:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  7. Lanjouw, Peter & Ravallion, Martin, 1995. "Poverty and Household Size," Economic Journal, Royal Economic Society, vol. 105(433), pages 1415-34, November.
  8. Cesar Martinelli & Susan W Parker, 2007. "Deception and Misreporting in a Social Program," Levine's Bibliography 843644000000000191, UCLA Department of Economics.
  9. Coady, David P. & Grosh, Margaret & Hoddinott, John, 2002. "Targeting outcomes redux," FCND briefs 144, International Food Policy Research Institute (IFPRI).
  10. Stephen Pudney & Monica Hernandez & Ruth Hancock, 2002. "The Welfare Cost of Means-Testing: Pensioner Participation in Income Support," Discussion Papers in Economics 03/2, Department of Economics, University of Leicester.
  11. repec:ese:iserwp:2006-12 is not listed on IDEAS
  12. Angus Deaton & Christina Paxson, 1998. "Economies of Scale, Household Size, and the Demand for Food," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 897-930, October.
  13. Micklewright, John & Coudouel, Aline & Marnie, Sheila, 2004. "Targeting and Self-Targeting in a New Social Assistance Scheme," IZA Discussion Papers 1112, Institute for the Study of Labor (IZA).
  14. Duclos, Jean-Yves, 1995. "Modelling the take-up of state support," Journal of Public Economics, Elsevier, vol. 58(3), pages 391-415, November.
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Citations

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Cited by:
  1. Armando Barrientos & Juan Miguel Villa, 2014. "Economic and political inclusion of human development conditional transfer programmes in Latin America?," Brooks World Poverty Institute Working Paper Series 20014, BWPI, The University of Manchester.
  2. Vivi Alatas & Abhijit Banerjee & Rema Hanna & Benjamin A. Olken & Ririn Purnamasari & Matthew Wai-Poi, 2013. "Ordeal Mechanisms In Targeting: Theory And Evidence From A Field Experiment In Indonesia," NBER Working Papers 19127, National Bureau of Economic Research, Inc.

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