Targeting Social Transfers to the Poor in Mexico
- ISBN-10
- 1451872070
- ISBN-13
- 9781451872071
- Category
- Business & Economics
- Language
- English
- Published
- 2009-03-01
- Publisher
- International Monetary Fund
- Authors
- Mr.David Coady, Susan Parker
Description
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.
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