## 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](https://www.imf.org/en/publications/wp/issues/2016/12/31/targeting-social-transfers-to-the-poor-in-mexico-22683)

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## Bibliographic details
- Authors: David Coady, Susan Parker
- Published: March 1, 2009
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451872071.001

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### 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.

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## Content in this bundle

- **_wp0960 — References / Chapter 2: Application Outcomes Under Universal Knowledge**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/targeting-social-transfers-to-the-poor-in-mexico-22683_