Targeting Social Transfers to the Poor in Mexico
IMF Working Papers, March 1, 2009
Source details
- Canonical URL
- Targeting Social Transfers to the Poor in Mexico
Other formats
Bibliographic details
- Authors: David Coady, Susan Parker
- Published: March 1, 2009
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451872071.001
Summary
- 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.
- Targeting can be further improved through redesigning the means test and differentiating transfers according to demographic characteristics.
Major findings and analysis
- Self-selection mechanism:
- Excludes high-income households through the requirement that households acquire knowledge about the program and apply for benefits.
- Administrative targeting (means test):
- Excludes mainly middle-income households.
- Interaction effect:
- Expanding program knowledge across households substantially increases applications from non-poor households, which increases the reliance on administrative targeting to prevent leakage to non-poor households.
- Potential improvements:
- Redesigning the means test.
- Differentiating transfers according to demographic characteristics.
Content in this bundle
- _wp0960 — References / Chapter 2: Application Outcomes Under Universal Knowledge