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Targeting Social Transfers to the Poor in Mexico

Targeting Social Transfers to the Poor in Mexico by David Coady
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Mexico’s main social support program, Oportunidades, combines two methods to target cash to poor households: an initial self-selection by households who acquire knowledge about the program and apply for benefits, followed by an administrative determination of eligibility based on a means test. Self-selection improves targeting by excluding high-income households, while administrative targeting does so mainly by excluding middle-income households. The two methods are complementary: expanding program knowledge across households substantially increases applications from non-poor households, thus reinforcing the importance of administrative targeting. The paper shows that targeting can be further improved through redesigning the means test and differentiating transfers according to demographic characteristics.
International Monetary Fund; March 2009
33 pages; ISBN 9781452792453
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Title: Targeting Social Transfers to the Poor in Mexico
Author: David Coady; Susan Parker