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The impact of Oportunidades on human capital and income distribution in Mexico: A top-down/bottom-up approach

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  • Debowicz, Darío
  • Golan, Jennifer

Abstract

To analyze the effects of the Mexican Oportunidades conditional cash transfer program on school attendance and household income distribution, this paper links a microeconometric simulation model and a general equilibrium model in a bidirectional way, so to explicitly take spillover effects of the program into account. Our results suggest that partial equilibrium analysis alone underestimates the distributional effects of the program. Extending the coverage of the program to the poor increases school attendance, reduces child labor supply, and increases the equilibrium wages of children who remain at work. With a relatively low fiscal cost, Mexican social policy could further reduce income inequality and poverty.

Suggested Citation

  • Debowicz, Darío & Golan, Jennifer, 2014. "The impact of Oportunidades on human capital and income distribution in Mexico: A top-down/bottom-up approach," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 24-42.
    • Handle: RePEc:eee:jpolmo:v:36:y:2014:i:1:p:24-42
    DOI: 10.1016/j.jpolmod.2013.10.014
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    More about this item

    Keywords

    Computable general equilibrium (CGE); Microsimulation; Oportunidades; Income inequality; Poverty;
    All these keywords.

    JEL classification:

    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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