Targeting Social Transfers to the Poor in Mexico
ISBN: 9781451916423
Platform/Publisher: Ebook Central / International Monetary Fund
Digital rights: Users: Unlimited; Printing: Limited; Download: 7 Days at a Time
Subjects: Social Science; Economics;

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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