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Social Protection Programs and Employment: The Case of Mexico's Seguro Popular Program

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  • Raymundo M. Campos-Vázquez

    () (Profesor-Investigador, Centro de Estudios Económicos, COLMEX. Mexico City.)

  • Melissa A. Knox

    () (Lecturer, Department of Economics, University of Washington. Seattle WA, USA.)

Abstract

Mexico created Seguro Popular in 2002 with the goal of providing free or subsidized health insurance coverage to 47 million uninsured people by the year 2013. Hence, one unintended consequence of the program could be an increase in the size of the informal sector. The introduction of the Seguro Popular program was conducted in stages, across municipalities and time. We exploit this variation and implement a differences-in-differences approach in order to identify the causal effect of the program in formal employment outcomes. We analyze the effect of Seguro Popular using 33 large and relatively rich cities from labor force surveys conducted from 2001 to 2004. In order to measure the effect for poorer municipalities, we also use the individual-level Oportunidades dataset that covers 136 municipalities from 2002 to 2004. We find little evidence of any correlation between Seguro Popular and the decision of workers to be employed in the formal or informal sector. One possible explanation of our findings is the low enrollment of the Seguro Popular program during the period we study. We provide suggestive evidence from the 33 cities that the result holds for the 2005 to 2006 period as well. We conclude that the recent increase in informal employment in large municipalities in Mexico is due to other causes.

Suggested Citation

  • Raymundo M. Campos-Vázquez & Melissa A. Knox, 2013. "Social Protection Programs and Employment: The Case of Mexico's Seguro Popular Program," Economía Mexicana NUEVA ÉPOCA, , vol. 0(2), pages 403-448, July-Dece.
  • Handle: RePEc:emc:ecomex:v:22:y:2013:i:2:p:403-448
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Pfutze,Tobias & Rodriguez Castelan,Carlos, 2015. "Can a small social pension promote labor force participation ? evidence from the Colombia Mayor program," Policy Research Working Paper Series 7516, The World Bank.
    2. Aterido, Reyes & Hallward-Driemeier, Mary & Pages, Carmen, 2011. "Does expanding health insurance beyond formal-sector workers encourage informality ? measuring the impact of Mexico's Seguro Popular," Policy Research Working Paper Series 5785, The World Bank.
    3. Bosch, Mariano & Manacorda, Marco, 2012. "Social policies and labor market outcomes in Latin America and the Caribbean: a review of the existing evidence," LSE Research Online Documents on Economics 58003, London School of Economics and Political Science, LSE Library.
    4. Alejandro Del Valle, 2013. "Is Formal Employment Discouraged by the Provision of Free. Health Services to the Uninsured ? Evidence From a Natural Experiment in Mexico," PSE Working Papers halshs-00838000, HAL.
    5. Tobias Pfutze, 2015. "Does access to health insurance reduce the risk of miscarriages? Evidence from Mexico’s Seguro popular," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), pages 1-10.
    6. Adriana Camacho & Emily Conover & Alejandro Hoyos, 2014. "Effects of Colombia's Social Protection System on Workers' Choice between Formal and Informal Employment," World Bank Economic Review, World Bank Group, vol. 28(3), pages 446-466.
    7. Arias, Javier & Artuc, Erhan & Lederman, Daniel & Rojas, Diego, 2013. "Trade, informal employment and labor adjustment costs," Policy Research Working Paper Series 6614, The World Bank.
    8. François Gerard & Gustavo Gonzaga, 2011. "Unemployment Insurance in Developing Countries: The Case of Brazil," Textos para discussão 593, Department of Economics PUC-Rio (Brazil).
    9. Nga Le Thi Quynh & Groot, Wim & Tomini, Sonila M. & Tomini, Florian, 2017. "Effects of health insurance on labour supply: A systematic review," MERIT Working Papers 017, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. François Gerard & Gustavo Gonzaga, 2013. "Informal Labor and the Cost of Social Programs: Evidence from 15 Years of Unemployment Insurance in Brazil," Textos para discussão 608, Department of Economics PUC-Rio (Brazil).

    More about this item

    Keywords

    informalidad; México; empleo; Seguro Popular.;

    JEL classification:

    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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