1. Ministry of Social Development SEDESOL Mexico Design and Evaluation of Social Programmes Gonzalo Hernandez, Gustavo Merino, Ana Santiago, Miguel Szekely

2. PRESENTATION 1. Designing a new programme: Plataforma de Oportunidades 2. Evaluation of Social Programmes Evaluation System at SEDESOL Evaluation of Plataforma de Oportunidades

3. 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. Oportunidades 4 critical issues in the design of Oportunidades 1. Demographics 2. Uncertain incentives problem 3. Final-grade repetition incentives 4. Potentially conflicting incentives with other programmes

5. Oportunidades 1.Demographics: What can be accomplished today with the beneficiaries of Oportunidades will have an effect in the next 50 years

6. 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. Rural Urban Average income of the 30% poorest households (2000)

7. 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).

8. 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 Population 12 to 18 years with occupation 14.9 % enrolled in school 45.9 % enrolled in school

9. Plataforma de Oportunidades: Your first patrimony Proposal

10. Contigo strategy First Step: Widen the “doors” in alignement with Contigo strategy Elementary 1 Jr. High School 2 Jr. High School 3 Jr. High School 1 High School 2 High School 3 High School Options Capabilities Patrimony Protection

11. the platform” of Oportunidades Second Step: Create “the 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 Options Capabilities Patrimony Protection Fund $ Cash Deposit in Bank Account Giving Points each year

12. The first generation has the following options: Program Wing Capatbilities Higher Education Pronabes (SEP) PRONABES SEP Productive Options and Savings Options Crédito y otros proyectos productivos en cajas de ahorro Credit and other productive projects in cajas de ahorro Protection Medical Insurance Seguro para la familia (IMSS) Insurance for the family IMSS (Popular Insurance) Patrimony Housing Vivah VIVAH

13. 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 Value Relationship between fund´s value and monthly income $3,0002.01 $4,5003.02 $6,0004.03

14. Oportunidades 4 critical issues in the design of Oportunidades 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

15. Evaluation Evaluation System Evaluation of Plataforma de Oportunidades

16. 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.

17. 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.

18. 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

19. 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

20. Evaluation of Plataforma de Oportunidades Objective : Increase High School enrolment Increase individual’s assets (Are liquidity constraints important?)

21. 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.

22. Methodology School 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

23. 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?