MEXICO ’ S PROGRESA PROGRAM: WHO BENEFITS? A Presentation by Deon Filmer Of 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 Percent of Total Program Benefits

PROGRESA Targeting Accomplishments (II): Reaching Bottom 40% of National Population Percent of Total Program Benefits

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 Months  POVERTY: 45% Reduction in Severity of Poverty

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

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: org/files/27999_Coady.pdf