the impact evaluation of the progresa/oportunidades program of mexico

The Impact Evaluation of the PROGRESA/Oportunidades

program of Mexico

Emmanuel SkoufiasThe World Bank

PRMPRApril 2007

Why are CCT programs attractive?-1• CCT can provide the foundation of a

comprehensive Poverty Alleviation and Social Protection Policy• Induce investments by poor on human

capital •Can mitigate short-run macroeconomic

shocks•Can facilitate the phase-out of price subsidies

and/or other less effective programs•Can serve as a basic social safety net system

available to ALL households (complementary to the safety net system accessible through employment in formal sector)

Why are CCT programs attractive?-2

• CCT can achieve a significant redistribution of income in favor of the poor under tight fiscal conditions •Oportunidades was initiated in the

context of a short-run economic crisis (1994-95) and was designed as medium-term response to the crisis

•Oportunidades gradually replaced generalized food subsidies with direct monetary transfers

Why are CCT programs attractive? -3

•CCT exploit the complementarities among health, education, and nutrition.•Coordination: Promote coordination

of poverty alleviation efforts among Gov’t ministries (education, health, nutrition)

•Synergy: simultaneous provision of health, education and nutrition benefits to all the beneficiaries.

Why are CCT programs attractive?-4

• Co-responsibility: The beneficiaries need to take specific actions or else they do not receive benefit

• CCT have potential of leading to lasting improvements in the well being of the poor•Evidence from rigorous impact evaluation

of Oportunidades in Mexico Familias en Accion in Colombias and other countries

Dual Objectives of CCT Long-run poverty alleviation

through investment in human capital (i.e., education, health and nutrition) Early Interventions have much

higher returns over life-cycle Short-run effect on poverty

through cash transfers

How CCT try to achieve their objectives?-1

Targeting (geographic/household-level) Oportunidades combines

geographic/village-level with household level targeting within villages

Simultaneous intervention in 3 key sectors (synergy)

How CCT try to achieve their objectives?-2

Conditioning cash transfers to regular school attendance and visits to health centers

Cash transfers given to mothersParallel support on Supply Side

(schools & health centers)

Controversial aspects of Oportunidades-1

Why grant direct monetary transfers instead of food in-kind, vouchers, or improving supply side of services.

Distribution of large volumes of food free of charge can inhibit the development of private commercial channels and create unfair competition with marginal producers in the area

Why target on the extreme/structurally poor and not include all?

Setting new selection criteria: Why not than start from beneficiary lists of existing programs or obtaining the roster of beneficiaries from community proposals


Creating a single national roster of beneficiaries

Giving transfers directly to individuals rather than to communities

Having unique, non-discretionary rules for the whole country rather than allowing flexibility for local initiatives and conditions in each state


Granting benefits to women, given potential family conflicts

Having possible impact on fertility (since benefits are linked to family demographics)

Size of cash transferthe definition of family co-responsibilities

and their certification (might generate additional workload for teachers and medical personnel)

How the controversial aspects of Oportunidades

were managedPilotingExpansion of the program in phasesIndependent and rigorous evaluation

(targeting, impact of the program on health, education, nutrition, social relations, women’s status etc.)

Monitoring Operational evaluation of the programCost analysis

Why Evaluation? Economic Reasons

Improve design and effectiveness of the program

Comparing program impacts allows G to reallocate funds from less to more effective programs and thus to an increase in Social Welfare

Social Reasons (increases transparency & accountability)

Political Reasons Credibility/break with “bad”

practices of past

CCT programs (like Oportunidades) Expanding

Brazil: Bolsa Familia=Bolsa Escola, Bolsa Alimentacao & Programa de Erradicaçao do Trabalho Infantil (PETI)

Colombia: Familias en Acción Honduras: Programa de Asignación Familiar (PRAF) Jamaica: Program of Advancement through Health

and Education (PATH) Nicaragua: Red de Protección Social (RPS) Turkey Ecuador: Bono Solidario Argentina: Bangladesh: Food for Education

OPORTUNIDADES(previously called PROGRESA)

Large program covering rural and marginal urban areas In 2004: 5 million families or 25 million

individuals In 2004: budget of US$ 2.5 billion or

0.3% of GDP

Program Description & Benefits

Education component A system of educational grants (details

below) Monetary support or the acquisition of

school materials/supplies (The above benefits are tied to enrollment

and regular (85%) school attendance) Improved schools and quality of

educations (teacher salaries)


Health and Nutrition Component basic package of primary heath-care services Food support (cash) nutritional supplements: 6 packs/child/mo; 20% of

caloric requirements and 100% of necessary micronutrients)

(The above benefits are tied to regular visits to health-service centers). Information and training Improved supply and quality of health services

(medicine availability etc.)


Average benefit received by beneficiary households: or 20% of the value of consumption expenditure before program

About half transfer is the cash transfer for food and the rest from the school-related cash transfer

0

10

20

30

40

50

60

70

80

90

100

3° 4° 5° 6° 1° 2° 3° 1° 2° 3°0

100

200

300

400

500

600

700

Education grant for boys

Education grant forgirls

Attendance by girls Attendance by boys

Primary Secondary High School

Atte

ndan

ce%

Monthly

educationgrants

0

10

20

30

40

50

60

70

80

90

100

3° 4° 5° 6° 1° 2° 3° 1° 2° 3°0

100

200

300

400

500

600

700





0

10

20

30

40

50

60

70

80

90

100

3° 4° 5° 6° 1° 2° 3° 1° 2° 3°0

100

200

300

400

500

600

700









Atte

ndan

ce%

Monthly

educationgrants

Monthly Amount of Educational Grant (Pesos)

Grade

Boys

Girls Primary

3rd year

60

60 4th year

70

70

5th year

90

90 6th year

120

120

Secondary

1st year

175

185

2nd year

185

205 3rd year

195

225

Note: The standard age for primary school entry (1st year) is 5-6 years, so that primary school children are usually in the age group 6-12 years and secondary-school children in the age group 13-18 years.

Components of the Basic Health Service Package 1. Basic sanitation at the family level 2. Family planning 3. Prenatal, childbirth and puerperal care 4. Supervision of nutrition and children's growth 5. Vaccinations 6. Prevention and treatment of outbreaks of diarrhea in the home 7. Anti-parasite treatment 8. Prevention and treatment of respiratory infections 9. Prevention and control of tuberculosis 10. Prevention and control of high blood pressure and diabetes mellitus 11. Accident prevention and first-aid for injuries 12. Community training for health care self-help Note: Actions aimed at identifying and treating hearing and sight

problems that inhibit the learning capacity of children and young people will also be incorporated.

Annual frequency of health care

Age group Annual frequency

_ Children

Newborn to one year of age

One to two years

Three to five years

Six to eleven years

7 check-ups: 7 and 28 days; 2, 4, 6, 9 & 12 months

4 check-ups: one every three months

3 check-ups: one every four months

2 check-ups: one every six months

_ Women

Of childbearing age

Pregnant

During puerperium and lactation

4 check-ups: one every three months

5 check-ups during prenatal period.

2 check-ups: in immediate puerperium and during lactation

_ Adults and youths

Young adults

Senior citizens

One check-up per year

One check-up per year

EXPERIMENTAL DESIGN: Program randomized at the locality level (Pipeline experimental design)

IFPRI not present at time of selection of T and C localities

Report examined differences between T and C for more than 650 variables at the locality level (comparison of locality means) and at the household level (comparison of household means)

Sample of 506 localities– 186 control (no program)– 320 treatment (receive program)

24, 077 Households (hh)78% beneficiariesDifferences between eligible hh and actual beneficiaries receiving benefitsDensification (initially 52% of hh classified as eligible)

PROGRESA/OPORTUNIDADES: Evaluation Design

TargetingStep 1: geographical targeting

Identify localities of highest marginalityStep 2: Household-level targeting

Within the localities identified in step 1, conduct a household census and use that census to collect socio-demographic data and information on housing characteristics that is consistent and standard nationwide.

Use discriminant analysis on census data to classify household as poor or nonpoor

Table: A Decomposition of the Sample of All Households in Treatment and Control Villages

Treatment

Control

E (Y) 2DIFimpact estimate

Before After

tviXRiTRiTtiYj jjTRRT ,,)2*(2,

Using regressions to get 2DIF estimates:

•Y(i,t) denotes the value of the outcome indicator in household (or individual) i in period t, •alpha, beta and theta are fixed parameters to be estimated, •T(i) is an binary variable taking the value of 1 if the household belongs in a treatment community and 0 otherwise (i.e., for control communities), •R2 is a binary variable equal to 1 for the second round of the panel (or the round after the initiation of the program) and equal to 0 for the first round (the round before the initiation of the program), •X is a vector of household (and possibly village) characteristics;•last term is an error term summarizing the influence random disturbances.

Limit sample to eligible households in treatment and control and run regression:

a

j jjTRRT XRTYE X,12,1|

j jjT XRTYE X,02,1|

j jjR XRTYE X,12,0|

j jjXRTYE X,02,0|

BADIF TRRRTYERTYE XX ,02,1|,12,1|

DIF2=TR=

CSDIF TRTRTYERTYE XX ,12,0|,12,1|

XX ,02,1|,12,1| RTYERTYE


Evaluation Tools

Formal surveys (Semi)-structured observations

and interviews Focus groups with stakeholders

(beneficiaries, local leaders, local PROGRESA officials, doctors, nurses, school teachers, promotoras)

PROGRESA Evaluation Surveys/Data

BEFORE initiation of program:– Oct/Nov 97:

Household census to select beneficiaries

– March 98: consumption, school attendance, health

AFTER initiation of program– Nov 98– June 99– Nov/Dec 99Included survey

of beneficiary households regarding operations

PROGRESA Evaluation Surveys

Additional Info Sources

School & clinic survey School and clinic

administrative data Nutrition survey conducted

independently by Min. of Health and INSP

Student achievement test scores by Min of Education

Record of payments distributed to beneficiary households

Topics of PROGRESA’s Evaluation

Targeting accuracy and impact on poverty

School enrollment, attendance, child labor, achievement scores

Health and utilization of health facilities

Child Nutrition Household Consumption & Nutrition

Topics of PROGRESA’s Evaluation cont’d

Operation of the program and perceptions of stakeholders

Cost-Analysis and Cost Effectiveness

Status of women, community relations

Adult labor supply, leisure Impact on short-run poverty intrahousehold transfers

Conditional Cash Transfers, Adult Work Incentives,

and Poverty

Emmanuel SkoufiasThe World Bank

[email protected]

Vincenzo di Maro University College London

[email protected]

November 3, 2006LACEA meetings Mexico City

mailto:[email protected]

mailto:[email protected]

Introduction-1

Means-tested CCT programs increasingly popularTheir success at reducing current poverty depends

on whether, and the extent to which, cash transfers reduce adult work incentives.

In a CCT a cash transfer can be considered as having offsetting income and substitution effects. Income effect: The cash transfer increases household

income which in turn increases both Consumption and Leisure (decreases adult labor supply).

Substitution effects: associated with meeting the conditionalities of the program. Direct and indirect time costs that depend on the substitution possibilities in the time of family members used in household production.

Introduction-2 Thus, the response of adult labor supply to CCTs can

only be determined empirically. Most welfare programs in the US, have explicit

disincentives to work. In most CCT programs the level of benefits received

is not affected by the work decisions of hh members or the income level of the hh (once the hh is determined as eligible for the program).

However, there are other sources of negative incentives on adult labor supply for both eligible and non-eligible households. Eligible hh may work/earn less so as not to get an income

level above the poverty threshold used by the program. Non-eligible hh may work/earn less so as to qualify for the

program

Introduction-3 Empirical evidence on how labor

supply responds to transfers is scarce. Sahn & Alderman (1996): the labor supply effect of a rice subsidy in Sri Lanka is significantly large.

Objectives-1Use data from the PROGRESA 1997-99 evaluation

sample to investigate: whether eligibility for program affect adult

labor force participation (in the treatment villages)

whether the presence of the program affects the labor force participation of adults from non-eligible households (in the treatment villages)

The effect of eligibility on adult leisure timeThe impact of the program on poverty

measures based on household income.

where

Participation in Labor Force

Leisure (from time allocation survey in June 1999:

iTRRRtiY TRRR 432, 432

titiXRiTRiTRiTJ

jjjTRTRTR ,,4*3*2*

1432

TR = XX ,02,1|,12,1|2 RTYERTYEDIF


i

J

jjjT iXiTiL

10

Table 1: Impact (2DIF estimates) on the probability of working among eligible (E=1) adults

Impact on Males Impact on Females

Oct. 98 Jun-99 Nov. 99 Oct. 98 Jun-99 Nov. 99 Age group

pre-prog labor force

coef. se t-stat coef. se t-stat coef. Se t-stat

pre-prog labor force

coef. se t-stat coef. se t-stat coef. se t-stat

All Work

18-24 0.86 -0.005 0.018 -0.32 -0.011 0.019 -0.58 0 0.019 0.04 0.18 -0.022 0.016 -1.3 -0.037** 0.015 -2.23 -0.02 0.017 -1.13

25-34 0.94 -0.003 0.01 -0.32 -0.014 0.01 -1.45 0.001 0.009 0.2 0.16 -0.012 0.015 -0.77 -0.019 0.013 -1.33 -0.012 0.015 -0.78

35-44 0.95 0.005 0.009 0.54 0.009 0.009 0.95 0.013 0.008 1.39 0.18 -0.014 0.013 -0.99 0.011 0.018 0.61 -0.017 0.016 -0.99

45-54 0.94 0 0.013 0.01 -0.003 0.014 -0.26 0.014 0.011 1.18 0.18 -0.038** 0.014 -2.36 -0.03* 0.014 -1.91 -0.012 0.02 -0.61

55 + 0.78 -0.008 0.019 -0.44 -0.02 0.023 -0.89 0 0.019 0 0.15 0.002 0.014 0.21 0.011 0.013 0.83 0.032** 0.017 1.96

All adults 0.89 -0.003 0.009 -0.36 -0.007 0.009 -0.81 0.006 0.008 0.7 0.17 -0.014 0.011 -1.24 -0.013 0.01 -1.18 -0.006 0.012 -0.5

Salaried work

18-24 0.64 0.04* 0.025 1.78 0.021 0.026 0.8 0.023 0.03 0.76 0.1 -0.003 0.012 -0.29 -0.026** 0.011 -2.08 -0.016 0.011 -1.34

25-34 0.7 0.034 0.025 1.27 0.037* 0.021 1.65 0.017 0.026 0.67 0.07 0.005 0.008 0.6 -0.003 0.008 -0.33 0.006 0.009 0.76

35-44 0.66 0.044* 0.025 1.65 0.034 0.025 1.3 0.014 0.029 0.49 0.07 0.002 0.009 0.31 0.006 0.01 0.63 -0.003 0.009 -0.37

45-54 0.62 0.054* 0.031 1.66 0.038 0.031 1.19 0.043 0.031 1.36 0.05 -0.001 0.01 -0.16 -0.005 0.009 -0.56 0.008 0.012 0.68

55 + 0.43 0.04 0.034 1.18 0.025 0.031 0.79 0.019 0.033 0.58 0.04 0.005 0.007 0.77 0.006 0.008 0.85 0.013* 0.008 1.74

All adults 0.61 0.045 0.023 1.87 0.034 0.021 1.56 0.025 0.023 1.06 0.07 0.002 0.005 0.36 -0.004 0.005 -0.74 0.001 0.006 0.2

Self-employed/family

business

18-24 0.21 -0.035* 0.018 -1.8 -0.017 0.02 -0.85 0 0.021 0.01 0.07 -0.013 0.009 -1.33 -0.004 0.01 -0.37 0.008 0.014 0.64

25-34 0.24 -0.03 0.022 -1.27 -0.048 0.017 -2.57 -0.01 0.023 -0.46 0.09 -0.008 0.01 -0.76 -0.01 0.008 -1.18 -0.012 0.011 -1.05

35-44 0.29 -0.036 0.024 -1.43 -0.02 0.023 -0.82 0.02 0.028 0.07 0.11 -0.013 0.008 -1.48 0.02 0.016 1.35 -0.008 0.012 -0.67

45-54 0.31 -0.047 0.03 -1.46 -0.037 0.029 -1.2 -0.023 0.029 -0.79 0.13 -0.022* 0.01 -2.22 -0.018 0.01 -1.53 -0.004 0.016 -0.29

55 + 0.35 -0.031 0.027 -1.13 -0.029 0.024 -1.18 -0.002 0.027 -0.1 0.1 -0.002 0.01 -0.2 0.007 0.01 0.72 0.018 0.016 1.22

All adults 0.28 -0.035 0.019 -1.75 -0.031 0.017 -1.78 -0.007 0.02 -0.38 0.1 -0.011 0.007 -1.46 -0.002 0.008 -0.27 0 0.01 -0.07

***=significant at 1% level, **=significant at 5% level, *=significant at 10% level See text for more details

Table 2: Impact (2DIF estimates) on the probability of working among NON-Eligible (E=0) adults

Impact on Males Impact on Females

Oct. 98 Jun-99 Nov. 99 Oct. 98 Jun-99 Nov. 99 Age group

Pre-prog labor force

participation

coef. se t-stat coef. se t-stat coef. t-stat

Pre-prog labor force

participation

coef. se t-stat coef. se t-stat coef. se t-stat

All Work

18-24 0.88 0.003 0.026 0.15 -0.029 0.029 -1.03 -0.016 0.029 -0.57 0.29 0.001 0.03 0.05 -0.006 0.03 -0.22 -0.003 0.034 -0.1

25-34 0.95 -0.021 0.021 -1.03 -0.036* 0.023 -1.74 0.002 0.02 0.11 0.32 0.015 0.033 0.47 0.039 0.037 1.08 -0.01 0.034 -0.3

35-44 0.96 -0.022 0.023 -1.1 -0.008 0.02 -0.43 0.004 0.02 0.21 0.26 -0.018 0.031 -0.57 0.012 0.031 0.39 -0.061** 0.028 -1.96

45-54 0.96 -0.032 0.026 -1.34 -0.016 0.024 -0.85 0.015 0.019 0.71 0.21 0.018 0.028 0.69 0.007 0.028 0.25 -0.032 0.021 -1.42

55 + 0.88 -0.06 0.024 -0.26 -0.026 0.028 -0.97 -0.017 0.027 -0.65 0.18 -0.034* 0.016 -1.9 -0.031* 0.017 -1.67 -0.035* 0.019 -1.62

All adults 0.92 -0.014 0.011 -1.23 -0.024 0.012 -2.03 -0.007 0.011 -0.63 0.27 -0.01 0.017 -0.59 -0.002 0.017 -0.14 -0.03 0.017 -1.71

Salaried work

18-24 0.57 0.014 0.037 0.39 -0.015 0.047 -0.32 -0.029 0.04 -0.73 0.17 0.003 0.024 0.16 0.021 0.029 0.74 0.024 0.029 0.87

25-34 0.58 0.028 0.034 0.83 0.023 0.038 0.61 0.027 0.04 0.68 0.15 0.029 0.025 1.23 0.015 0.027 0.57 0.007 0.024 0.31

35-44 0.54 0.042 0.04 1.02 0.046 0.04 1.12 0.05 0.048 1.01 0.11 0.01 0.02 0.5 -0.01 0.019 -0.5 -0.007 0.019 -0.35

45-54 0.47 -0.035 0.051 -0.7 -0.032 0.0511 -0.63 0.028 0.511 0.55 0.08 0.001 0.015 0.08 0.004 0.016 0.25 -0.02* 0.009 -1.79

55 + 0.37 0.013 0.044 0.3 -0.01 0.041 -0.24 -0.032 0.041 -0.77 0.04 0.001 0.009 0.14 -0.005 0.009 -0.55 -0.003 0.008 -0.43

All adults 0.5 0.016 0.028 0.59 0.002 0.03 0.1 0.001 0.029 0.04 0.11 0.005 0.009 0.57 0.002 0.011 0.24 -0.002 0.009 -0.3

Self-employed/family business

18-24 0.31 -0.02 0.03 -0.64 -0.01 0.033 -0.3 0.009 0.035 0.29 0.11 0.013 0.021 -0.7 -0.016 0.014 -1.01 -0.019 0.016 -1.08

25-34 0.38 -0.043 0.029 -1.41 -0.052 0.031 -1.57 -0.019 0.036 -0.52 0.16 0 0.021 -0.04 0.025 0.027 1.01 -0.015 0.02 -0.71

35-44 0.42 -0.054 0.037 -1.42 -0.046 0.037 -1.2 -0.037 0.045 -0.8 0.18 -0.015 0.023 -0.62 0.021 0.025 0.81 -0.044* 0.02 -1.85

45-54 0.49 0.01 0.046 0.22 0.02 0.047 0.43 -0.009 0.048 -0.18 0.17 0.011 0.023 0.49 0.006 0.021 0.3 -0.002 0.02 -0.14

55 + 0.51 -0.017 0.038 -0.45 -0.01 0.038 -0.27 0.021 0.039 0.54 0.18 -0.026* 0.012 -1.89 -0.02 0.014 -1.28 -0.026 0.015 -1.47

All adults 0.42 -0.026 0.024 -1.06 -0.02 0.025 -0.79 -0.002 0.027 -0.1 0.16 -0.005 0.012 -0.45 -0.001 0.012 -0.14 -0.022 0.011 -1.85

***=significant at 1% level, **=significant at 5% level, *=significant at 10% level See text for more details

Tables 1 & 2 results 2DIF (1):PROGRESA has no significant impact on

the labor force participation of adult males and/or females

There are no significant/lasting impacts on the allocation of time between salaried and self-employment activities,

though the program appears to be associated with a negative, albeit non-significant, effect on self-employment among males

Tables 1 & 2 results 2DIF (2):The presence of PROGRESA has no

significant impact on the labor force participation of adult males and/or females from noneligible households (in the treatment villages)

Table 3: Impact (CSDIF estimates) on Leisure of Eligible (E=1) adults

Men Women

Impact Impact

Jun-99 Jun-99 Age group

Pre-prog daily hours

coef. se t-stat

Pre-prog daily hours

coef. se t-stat 18-24 16.24 -0.321* 0.169 -1.9 17.18 0.026 0.087 0.3 25-34 14.69 0.122 0.122 1 16.17 -0.236 0.148 -1.6 35-44 14.64 -0.061 0.087 -0.7 16.65 -0.016 0.160 -0.1 45-54 14.72 0.06 0.200 0.3 17.44 0.023 -0.230 -0.1 55 + 16.63 -0.144 0.206 -0.7 19.21 0.09 0.150 0.6

*=significant at 10% level

Table 3 CSDIF (1):PROGRESA has no significant impact

on the leisure time of adult males and/or females

Impact of PROGRESA on Poverty (1):Results so far: program has no adverse

effects on labor incomeEffects on total hh income and thus poverty

depends on the direct and indirect costs associated with participation in PROGRESA.

Participation in PROGRESA (a) income losses form children’s work (b) give up benefits from other programs (DIF,

Ninos de Solidaridad, Abasto Social de Leche) in additional to the elimination of the Tortilla subsidy

Impact of PROGRESA on Poverty (2):Figures 1 & 2: the effects of PROGRESA on hh

income and poverty may not be adequately summarized by the size and incidence of the cash transfers

Econometric analysis based on individual and hh income in each round from a variety of sources: labor income, income from self-employment, other income (pensions, rent, and community profits) and government transfers (Ninos de Solidaridad, ININ, PROBECAT, PET, PROCAMPO) +PROGRESA Cash Transfers (from program admin records)

Figure 1 – Mean household income from childrenAmong beneficiary households with children aged 8-17

Panel a Mean household TOTAL income from Children

(excluding PROGRESA cash transfer)


Panel b Mean household LABOR income from Children


Panel c Mean household Other Income from Children

Figure 2

where

Impact on Poverty

tiRiTRRiTR

RiTRiTtiP

TRRTRR

TRRT

,4*43*3

2*2,,

4433

220

tiPoorztiyztiP ,*,,,

Poverty line: Canasta basica in Nov 97 Poverty line: Median of Nov 98 Consumption p.c. (a) Headcount Ratio P(0) (a) Headcount Ratio P(0)

Var Coeff. st.error t-val. p-val. Impact* Var Coeff. st.error t-val. p-val. Impact* T 0.0017 0.012 0.13 0.893 T 0.0228 0.019 1.23 0.219 R2 0.0183 0.007 2.49 0.013 R2 0.0379 0.012 3.28 0.001 R2xT 0.0007 0.009 0.08 0.938 0.09 R2xT -0.0271 0.014 -1.89 0.059 -4.88 R3 0.0429 0.009 4.91 0 R3 0.1120 0.011 10.46 0 R3xT -0.0060 0.011 -0.57 0.568 -0.73 R3xT -0.0545 0.014 -4.03 0 -9.83 R4 0.0392 0.006 6.29 0 R4 0.0533 0.012 4.39 0 R4xT -0.0207 0.009 -2.26 0.024 -2.52 R4xT -0.1004 0.016 -6.3 0 -18.11 _cons 0.8199 0.010 78.2 0 _cons 0.5316 0.015 36.44 0

Table 4: The impact of PROGRESA on poverty using two different poverty

(b) Poverty Gap P(1) (b) Poverty Gap P(1) Var. Coeff. st.error t-val. p-val. Impact* Var. Coeff. st.error t-val. p-val. Impact*

T 0.0215 0.014 1.53 0.126 T 0.0333 0.014 2.32 0.021 R2 0.0399 0.008 4.7 0 R2 0.0425 0.010 4.36 0 R2xT -0.0284 0.011 -2.61 0.009 -5.70 R2xT -0.0457 0.013 -3.6 0 -15.92 R3 0.0992 0.008 11.97 0 R3 0.1248 0.009 14.19 0 R3xT -0.0445 0.011 -4.2 0 -8.95 R3xT -0.0717 0.012 -6.08 0 -24.99 R4 0.0375 0.008 4.59 0 R4 0.0306 0.009 3.33 0.001 R4xT -0.0794 0.012 -6.74 0 -15.94 R4xT -0.1074 0.014 -7.71 0 -37.40 _cons 0.4763 0.011 45 0 _cons 0.2538 0.010 26.6 0

Poverty line: Canasta basica in Nov 97 Poverty line: Median of Nov 98 Consumption p.c.


(c) Severity of Poverty P(2) (c) Severity of Poverty P(2) Var. Coeff. st.error t-val. p-val. Impact* Var. Coeff. st.error t-val. p-val. Impact*

T 0.0287 0.014 2.1 0.037 T 0.0346 0.013 2.65 0.008 R2 0.0412 0.009 4.58 0 R2 0.0382 0.009 4.18 0 R2xT -0.0393 0.012 -3.37 0.001 -10.96 R2xT -0.0488 0.012 -4 0 -24.21 R3 0.1151 0.008 13.93 0 R3 0.1257 0.008 15.03 0 R3xT -0.0616 0.011 -5.61 0 -17.15 R3xT -0.0774 0.011 -6.73 0 -38.42 R4 0.0325 0.008 3.83 0 R4 0.0223 0.008 2.7 0.007 R4xT -0.0938 0.013 -7.36 0 -26.13 R4xT -0.0955 0.014 -7.03 0 -47.42 _cons 0.3301 0.010 34.68 0 _cons 0.1669 0.008 21.11 0

Poverty line: Canasta basica in Nov 97 Poverty line: Median of Nov 98 Consumption p.c.


Table 4 results: (1) PROGRESA had a significant impact in reducing

poverty between November 1997 and November 1999. E.g. using the 50th percentile of the value of consumption per

capita as a poverty line, suggests that the headcount poverty rate declined by around 4.88% between November 1997 and November 1998 and by 18.11% in the November 1999 in treatment areas (using as base the 55.44% headcount poverty rate in treatment localities in November 1997).

Over the same period, and using as base the corresponding value of the poverty gap and squared poverty gap indices in treatment areas in November 1997, the poverty gap measure declined by 37.40%, and the severity of poverty measure (squared poverty gap) declined by 47.42%.

The higher impacts of the program in reducing poverty over time are consistent with the findings of Gertler et al. (2006), who demonstrated that rural households increased their investments in microenterprises and agricultural activities which, improved the ability of households to generate income.

Table 4 results: (2)Estimates are remarkably in line with

the estimates obtained using ex-ante simulations. E.g. simulations based on the predicted

consumption of each household in the evaluation sample in November 1997 and adding the maximum amount of PROGRESA cash transfers an eligible household could receive assuming full compliance with the program’s requirements (see Skoufias et al., 2001).

Table 4 results: (3)The poverty reduction effects are

stronger for the poverty gap and severity of poverty measures, which put greater weight on the poorest of the poor, and our evidence suggests that these estimated poverty effects are robust to the choice of different poverty lines.

Figure 3 and Appendix A

Concluding RemarksPROGRESA does not have any

significant effect on adult labor supply choices.

There is not much evidence to support the hypothesis that PROGRESA beneficiaries use their transfers to “buy” more leisure.

Results are reinforced further by the result that PROGRESA leads to a substantial reduction in current poverty.

The Contributions of Program Evaluation-1

Program continued and improved Fox administration (begun in 2001) kept and

expanded the program Early operations reports in PROGRESA

identified implementation issues to be analyzed further (food supplements, intra-household conflict, targeting views)

Decision to maintain household targeting in PROGRESA expansion, but to add “self-selection” to administrative selection in urban areas

The Contributions of Program Evaluation-2

Program Design improved: Program expanded to urban areasBenefits extended to Preparatoria

Secondary levelJovenes con Oportunidades- aims to create

income generating opportunities for poor households through preferential access to microcredit, housing improvements, adult education and access to social/health insurance.

Critical Issues to be Resolved on CCT

Do CCT programs break the intergenerational transmission of poverty? Need long time-series

What is the minimal CCT that may be paid? Oportunidades: size of transfer based on

opportunity cost of children (child wage/value of children’s contribution to family…)

Critical Issues to be Resolved:

Impact on Children’s Achievement & Learning? Do CCT increase achievement or induce

teachers to lower grade-passing standards?

Teacher & health worker incentivesQuality of Services

Critical Issues to be Resolved:

Do CCT generate Program/Welfare Dependency? So far no negative incentive effects on

adultwork Transfers & Income generation

Exit Rule? Lack built-in flexibility to expand coverage

to households falling below poverty during crisis

Final IssueLong-Run Sustainability of Program

Budget & Political Economy of Program Support

Thank you

Evaluation Results-TargetingGeographic targeting of the program

in rural areas is good Method of selecting poor households

within localities is generally accurate (undercoverage of 7% )

PROGRESA’s targeting decreases the poverty gap P(1) by 30% and the severity of poverty P(2) by 45%

EducationAre more children attending school because

of PROGRESA?How much can schooling be expected to

increase?Are there more cost effective ways of

bringing children to school?Does PROGRESA have more impact in

certain grades?Any effects on drop-out rates, grade

progression, repetition, reentry?

All Boys 12-17 Years Old

0.2

0.3

0.4

0.5

0.6

0.7

Nov-97 Nov-98 Jun-99 Nov-99

Survey Round

Perc

ent A

tten

ding

Sch

ool

Las

t Wee

k

Treatment Control

All Girls 12-17 Years Old

0.2

0.3

0.4

0.5

0.6

0.7

Nov-97 Nov-98 Jun-99 Nov-99Survey Round

Perc

ent A

tten

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Sch

ool

Las

t Wee

k

Treatment Control

All Boys 12-17 Years Old

0.20

0.25

0.30

0.35

0.40


Survey Round

Perc

ent w

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ng L

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Treatment Control

All Girls 12-17 Years Old

0.05

0.10

0.15

0.20


Survey Round

Perc

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eek

Treatment Control

Evaluation Results: Education

PROGRESA has a positive effect the school attendance of both boys and girls in primary and secondary school Boys in secondary: increase by 8 % Girls in secondary: increase by 14%

Negative impact on children’s labor market participation (especially boys)

No observed increase in the attendance rate (frequency) of children in school.

PROGRESA increases overall educational attainment by 10% (and 8% higher earnings)

Evaluation Results: Education

Program effective in keeping children in school especially during the critical transition from primary to secondary

Less effective in bringing back to and keeping in school children who were out.

Earlier entry ages, less grade repetition, better grade progression

PROGRESA more cost-effective than increasing access to junior secondary education

Health

Does it increase visits to public health clinics?

Does PROGRESA have an effect on child health?

On the health of adults?

Incidence of Illness for 0-2 Year Olds

0.15

0.20

0.25

0.30

0.35

0.40

0.45

Baseline 7 MonthsPost Baseline

14 MonthsPost Baseline

20 MonthsPost Baseline

Prob

. Ill

in L

ast F

our

Wee

ks

PROGRESA Controls

Incidence of Illness for 3-5 Year Olds

0.05

0.10

0.150.20

0.25

0.30

Baseline 7 MonthsPost

Baseline

14 MonthsPost

Baseline

20 MonthsPost

Baseline

Prob

. Ill

in L

ast F

our

Wee

ks

PROGRESA Controls

Evaluation results: Health

Significant increase in visit rates in PROGRESA communities Increasing in nutrition monitoring visits,

immunization rates and prenatal care in 1st trimester (8% increase)

No substitution between private and public facilities

Evaluation results: Health

12% lower incidence of illness in children between ages 0-5.

Significantly positive effects on adult health

Nutrition

Does PROGRESA impact of child growth?

Household consumption and food diet?

Evaluation results: Nutrition

Significant effect at increasing child growth (1cm higher growth) and reducing the probability of stunting among children 12-36 mo.

Household total consumption increases PROGRESA households “eat better”

(higher expenditures on fruits, vegetables, meats & animal products)

Cost Analysis

Are the administrative costs of PROGRESA high?

What are the private costs associated with participation in the program?

What might be the indirect effects of the program on the national economy? (e.g. financing of the program)?

Evaluation Results: Cost Analysis

For every 100 pesos allocated to the program, 8.2 pesos are administration/program costs. Very low compared to LICONSA (40 pesos per

100 pesos) and TORTIVALES (14 pesos per 100)Targeting and conditioning of the program

makeup 56% of program costs (4.6 pesos out of 8.2 pesos)

Private costs (3.8 pesos out of 8.2 pesos)

Evaluation Results: Cost Analysis

Eliminating distortionary food subsidies and using funds to finance a program like PROGRESA leads to substantial welfare gains.

the impact evaluation of the progresa/oportunidades program of mexico

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