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Why conditional cash transfers programs fail to target the poor? The case of urban Mexico

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  • Pierre Levasseur

    (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)

Abstract

Given the limited financing capacity of developing countries, conditional cash transfer (CCT) programmes are an affordable means of providing a social safety net to vulnerable households. However, compliance with conditionalities may limit participation and increase dropouts, particularly when compliance-related constraints are high and cash incentives are relatively low. This empirical analysis determines how cash transfer amounts affect the probability that participating households will remain in a programme or drop out, looking at the case of Mexico, a developing country that has gradually expanded its CCT programme from rural to urban areas. Using longitudinal household surveys, this study finds that the poorest households are most likely to drop out of the programme. Interestingly, the level of cash transfers increases this probability for the poorest participants compared to the richest ones. It is concluded that the programme does not successfully retain the poorest households in the programme, because the cash incentives are too low in urban settings.
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Suggested Citation

  • Pierre Levasseur, 2018. "Why conditional cash transfers programs fail to target the poor? The case of urban Mexico," Post-Print hal-02273832, HAL.
    • Handle: RePEc:hal:journl:hal-02273832
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    References listed on IDEAS

    as
    1. Jere R. Behrman & Jorge Gallardo-Garc�a & Susan W. Parker & Petra E. Todd & Viviana V�lez-Grajales, 2012. "Are conditional cash transfers effective in urban areas? Evidence from Mexico," Education Economics, Taylor & Francis Journals, vol. 20(3), pages 233-259, February.
    2. Manuela Angelucci & Orazio Attanasio & Vincenzo Di Maro, 2012. "The Impact of Oportunidades on Consumption, Savings and Transfers," Fiscal Studies, Institute for Fiscal Studies, vol. 33(3), pages 305-334, September.
    3. González-Flores, Mario & Heracleous, Maria & Winters, Paul, 2012. "Leaving the Safety Net: An Analysis of Dropouts in an Urban Conditional Cash Transfer Program," World Development, Elsevier, vol. 40(12), pages 2505-2521.
    4. Álvarez, Carola & Devoto, Florencia & Winters, Paul, 2008. "Why do Beneficiaries Leave the Safety Net in Mexico? A Study of the Effects of Conditionality on Dropouts," World Development, Elsevier, vol. 36(4), pages 641-658, April.
    5. Levasseur, Pierre, 2019. "Can social programs break the vicious cycle between poverty and obesity? Evidence from urban Mexico," World Development, Elsevier, vol. 113(C), pages 143-156.
    6. Pierre Levasseur, 2019. "Can social programs break the vicious cycle between poverty and obesity?," Post-Print hal-02450319, HAL.
    7. Manuela Angelucci & Orazio Attanasio, 2009. "Oportunidades: Program Effect on Consumption, Low Participation, and Methodological Issues," Economic Development and Cultural Change, University of Chicago Press, vol. 57(3), pages 479-506, April.
    8. Paul Schultz, T., 2004. "School subsidies for the poor: evaluating the Mexican Progresa poverty program," Journal of Development Economics, Elsevier, vol. 74(1), pages 199-250, June.
    9. Skoufias, Emmanuel & Davis, Benjamin & de la Vega, Sergio, 2001. "Targeting the Poor in Mexico: An Evaluation of the Selection of Households into PROGRESA," World Development, Elsevier, vol. 29(10), pages 1769-1784, October.
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