MEXICO ’ S PROGRESA PROGRAM: WHO BENEFITS?

1. MEXICO’S PROGRESAPROGRAM: 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

6. 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

7. 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.

8. 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

9. 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

11. 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)

12. 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

13. 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

14. 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