MEXICO’S PROGRESA PROGRAM: WHO BENEFITS?

A Presentation by

Deon FilmerOf Material by

David Coady

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

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

PROGRESA Provides:

Monthly Cash and Food Payments to Women in Eligible Families

IF People in the Families Use Education and Health Services

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

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

PROGRESA Overall Accompishments: Serves Over 20 Million People, Around

One-Fifth of Mexico’s 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.

Assessing PROGRESA’S 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

PROGRESA Targeting Accomplishments (I):Reaching Bottom 20% of National Population

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PROGRESA Targeting Accomplishments (II):Reaching Bottom 40% of National Population

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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)

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

PROGRESA Design and Implementation IssuesGaining Community Acceptance of

Statistical Algorithms Used to Determine Household Eligibility

Assuring Timely PaymentsUpdating Lists of Eligible HouseholdsAssuring Accurate Monitoring

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