Ministry of Social DevelopmentSEDESOL

Mexico

Design and Evaluation of Social Programmes

Gonzalo Hernandez, Gustavo Merino, Ana Santiago, Miguel Szekely

PRESENTATION

1. Designing a new programme:

Plataforma de Oportunidades

2. Evaluation of Social Programmes

Evaluation System at SEDESOL

Evaluation of Plataforma de Oportunidades

From Progresa to Oportunidades

Nutrition, Health, Schooling

Increasing the number of beneficiaries: from 2.6 to 4.2 million

Moving to urban areas: Important number of poor families in urban areas

Grants to High School students: Young people leave school after secondary level

Primary, $90 Secondary, $150 High School, $550

More generous grant for girls in Secondary and High School

4 critical issues in the design of OportunidadesOportunidades

1. Demographics

2. Uncertain incentives problem

3. Final-grade repetition incentives

4. Potentially conflicting incentives with other programmes

1. Demographics: What can be accomplished today with the beneficiaries of OportunidadesOportunidades will have an

effect in the next 50 years

Age groups

0%

2%

4%

6%

8%

10%

12%

2000

2020

2040

0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99 +

Of the current beneficiaries

• 7,773,634 are less than 18 years old

• 2,962,606 are between 12 and 18 years old

2. Uncertain incentives

When Oportunidades extends coverage to urban areas, the level of benefits will remain the same, yet average household income is higher in urban areas.

2533

3027

2200

2300

2400

2500

2600

2700

2800

2900

3000

3100

Rural Urban

Average income of the 30% poorest households (2000)

3. Incentives for repetition of the final-grade of high school

If few or none “exit” options are available, then it may be more convenient for the beneficiary to repeat the last academic year, in order to continue receiving benefits (grants).

4. Potentially conflicting incentives between programs

Microcredit for productive projects can create “employment” opportunities for members of beneficiary households. These other programs can create incentives that compete with the incentive to remain in school.

Non renumerated worker in family business

Non. agrarian worker

Agrarian worker

Other non renumrated worker

Other

0

5

10

15

20

25

30

35

40

45

50

Population 12 to 18 years with occupation

14.9 % enrolled in school

45.9 % enrolled in school

Plataforma de Oportunidades:

Your first patrimony

Proposal

First Step:Widen the “doors” in alignement with Contigo Contigo

strategystrategy

Elementary 1 Jr. High School

2 Jr. High School

3 Jr. High School 1 High School

2 High School

3 High School

OptionsCapabilities Patrimony Protection

Second Step:Create “the platform” of Oportunidadesthe platform” of Oportunidades

Elementary 1 Jr. High School

2 Jr. High School

3 Jr. High School 1 High School

2 High School

3 High School

9-12 years

13-15 years

16-18-20 years

OptionsCapabilities Patrimony Protection

Fund

$ Cash

Deposit inBank Account

Giving Points each year

The first generation has the followingoptions:

ProgramWing

CapatbilitiesHigher

Education

Pronabes (SEP)

PRONABESSEP

ProductiveOptions and

Savings

OptionsCrédito y otros proyectos productivos en

cajas de ahorro

Credit and other productive projects in cajas de

ahorro

Protection MedicalInsurance Seguro para la familia

(IMSS)

Insurance for the familyIMSS

(Popular Insurance)

Patrimony Housing Vivah VIVAH

The value of the fund can be significant, reinforcing positive incentives generated by

Oportunidades…

The monthly family income of Oportunidades beneficiaries is aproximately $1490.

Fund´s ValueRelationship between fund´s value and monthly income

$3,000 2.01

$4,500 3.02

$6,000 4.03

4 critical issues in the design of OportunidadesOportunidades

1. Demographics: Better equiped individuals for crucial demographic boom

2. Uncertain incentives problem: More attractive programme; more schooling

3. Final-grade repetition incentives: Repetition may become less attractive

4. Potentially conflicting incentives with other programmes: Alligning incentives with other programmes

Evaluation

Evaluation System

Evaluation of Plataforma de Oportunidades

The Evaluation Process in SEDESOL

Mexico has a long tradition in social programmes (IMSS, subsidies, Pronasol, Progresa)

Some of them, however, have responded to various political situations

We don´t actually know the real impact of these programmes on the population…

… and we don’t have of course a ranking of these programmes in terms of efficiency

There isn’t yet a generalized evaluation practice.

The Evaluation Process in SEDESOL

Since 2000, SEDESOL must evaluate all social programmes through external institutions.

We invite many institutions and we choose the best project, given the budget constraint for each programme

This year we evaluated 26 programmes designed for various populations and with different objectives:

• Milk, Supply of Basic Goods in Rural Areas, Tortilla, Artcrafts, Temporary Employment, Oportunidades, Micro Credits, Women heads of Household, Indigenous population, etc.

Structural Problems

Only annual evaluations• The total impact of social programmes can’t be measured in the

short term

Limited resources

• Some institutions don’t participate

Since we evaluate each programme, we cannot profit from

economies of scale

Poor beneficiarie’s data base

Not enough human capital in the country

Support from International Agencies

IDB: Support for Oportunidades

IDB: Technical Co-operation. Resources for inviting

international experts. Scientific Committee.

World Bank: Institutional Development Fund.

• Resources to improve evaluation on certain

programmes and increase the Mexican human

capital on social evaluation

Evaluation of Plataforma de Oportunidades

Objective:

Increase High School enrolment

Increase individual’s assets

(Are liquidity constraints important?)

Methodology

Measure differences in outcome between beneficiaries and control groups. Two point in time.

Finding the proper control groups in order to measure the impact of both benefits: school attendance and financial capital accumulation

The effect of the financial bit: Giving randomly the full Fund to Oportunidades-students finishing high school in 2003.

MethodologySchool attendance:

Comparing secondary-high school transitions in randomly selected Plataforma-beneficiaries with Oportunidades-beneficiaries only, or

Comparing outcomes in 2002 (without Plataforma) and 2003 onwards (with Plataforma)

Testing preferences: Giving the whole fund without conditions

All this is subject to budget and political constraints

Methodology

Evaluate carefully the five exit door options in Plataforma:

Why did they choose a particular “exit door”?

Are there local problems with one or several options?

Will there be a difference in individual development in choosing different approaches?