Targeting Social Transfers to the Poor in Mexico

March 1, 2009

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Format: Chicago

David Coady, and Susan Parker. Targeting Social Transfers to the Poor in Mexico, (USA: International Monetary Fund, 2009) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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. The paper shows that targeting can be further improved through redesigning the means test and differentiating transfers according to demographic characteristics.

Subject: Budget planning and preparation, Education, Household consumption, Income inequality, National accounts, Personal income, Population and demographics, Public financial management (PFM)

Keywords: Administrative selection, Budget planning and preparation, Coverage, Household consumption, Income distribution, Leakage, Means testing, Mexico, Oportunidades, Participation rate, Personal income, Population share, Program budget, Random sample, Self selection, Share of transfer, Social welfare, Targeting, Transfer share, WP

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/060
Stock No:

WPIEA2009060
ISBN:

9781451872071
ISSN:

1018-5941

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