MEXICO’S PROGRESA PROGRAM: WHO BENEFITS?

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MEXICOS PROGRESA PROGRAM WHO BENEFITS?

• A Presentation by
• Deon Filmer
• Of Material by
• David Coady

2
PROGRESA Was Introduced in 1997 Because

• Rapid Economic Growth Was Not Leading to a
  Reduction in Poverty
• Existing Safety Net Programs Were Ineffectual
• Any Sustained Decrease in Poverty Was Thought To
  Require Not Just Immediate Social Assistance,
  but Longer-Term Social Development

3
PROGRESA Identifies Households Eligible to
Receive Benefits through a Two-Step Process

• Step One Geographic Targeting - Identification
  of Poor Villages from National Census Data about
  Educational Levels, Occupational Composition,
  Housing Conditions, Inhabitants Age and Gender.
• Step Two Proxy Means Testing Identification
  of Poor Households in the Poor Villages, on the
  Basis of Survey Information about Factors Related
  to Income

4
PROGRESA Provides

• Monthly Cash and Food Payments to Women in
  Eligible Families
• IF People in the Families Use Education and
  Health Services

5
Principal PROGRESA Education Benefit

• Up to 305 Pesos per Month for Each Child in
  Grades 3 9
• IF Child attends 85 or More of Classes

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Principal PROGRESA Health/Nutrition Benefit

• 125-Peso Monthly Food Transfer per Family
• IF Each Child Receives 2-4 Checkups annually,
  Adults Receive One Annual Checkup, Pregnant Women
  Receive Seven Pre- and Post-natal Checkups

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PROGRESA Overall Accompishments

• Serves Over 20 Million People, Around One-Fifth
  of Mexicos Population
• Provides 20 of Income of Participating Families
• Keeps Administrative Expenses under 10 of Total
  Program Cost
• Has Survived a Landmark Shift in Power Away from
  the Political Party that Established It.

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Assessing PROGRESAS Targeting and Impact

• Baseline Household Surveys Immediately Before and
  Two Years after PROGRESA Initiation
• In 506 Randomly-Selected Villages Qualifying for
  PROGRESA Participation, of Which
• 206 Began Participating in PROGRESA Shortly
  After Baseline Survey
• 186 Did Not Begin Participating in PROGRESA
  until After Follow-Up Survey

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PROGRESA Targeting Accomplishments (I)Reaching
Bottom 20 of National Population
Percent of Total Program Benefits
10
PROGRESA Targeting Accomplishments (II)Reaching
Bottom 40 of National Population
Percent of Total Program Benefits
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PROGRESA Targeting Accomplishments (III)Reasons
for Progressive Pattern, as Revealed through
Statistical Analysis

• Selection of Poor Villages Was Primary Factor
• Focus on Program Participation Also Important,
  Because of Larger Number of Children in Poor
  Families
• Selection of Poor Families within Villages Was
  Less Important (Because Most Families in
  Selected Villages Were Poor Would Not
  Necessarily Be True Were Program Extended to
  Higher-Income Areas)

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PROGRESA Illustrative Impact Accomplishments

• EDUCATION Increase in Secondary School
  Enrolment from 70 to 76
• HEALTH 20-25 Reduction in Incidence of
  Illness among Children Aged 0-5
• NUTRITION 16 Increase in Annual Growth Rate
  of Children 12-36 Months
• POVERTY 45 Reduction in Severity of Poverty

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PROGRESA Design and Implementation Issues

• Gaining Community Acceptance of Statistical
  Algorithms Used to Determine Household
  Eligibility
• Assuring Timely Payments
• Updating Lists of Eligible Households
• Assuring Accurate Monitoring

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For Further Information about PROGRESA, See

• David Coady, Alleviating Structural Poverty in
  Developing Countries The Approach of PROGRESA
  in Mexico, Background Paper for the 2004 World
  Development Report.
• Available at http//econ.worldbank.
• org/files/27999_Coady.pdf