PROGRESA and Its Impacts on the Welfare of Rural Households in Mexico

View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Research Papers in Economics PROGRESA and Its Impacts on the Welfare of Rural Households in Mexico Emmanuel Skoufias RESEARCH REPORT 139 INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE WASHINGTON, DC Copyright © 2005 International Food Policy Research Institute. All rights reserved. Sections of this material may be reproduced for personal and not-for-profit use without the express written permission of but with acknowledgment to IFPRI. To reproduce the material contained herein for profit or commercial use requires express written permission. To obtain permission, contact the Communications Division <[email protected]>. International Food Policy Research Institute 2033 K Street, NW Washington, DC 20006-1002 USA Telephone +1-202-862-5600 www.ifpri.org Library of Congress Cataloging-in-Publication Data Skoufias, Emmanuel. PROGRESA and its impacts on the welfare of rural households in Mexico / Emmanuel Skoufias. p. cm. — (Research report ; 139) Includes bibliographical references. ISBN 0-89629-142-1 (alk. paper) 1. Rural poor—Government policy—Mexico. 2. Programa de Educación, Salud y Alimentación (Mexico City, Mexico)—Evaluation. 3. Poverty— Government policy—Mexico. 4. Mexico—Social policy. I. Title. II. Research report (International Food Policy Research Institute) ; 139. HC140.P6.S58 2005 362.5′56′0972—dc22 2005006221 Contents List of Tables iv List of Figures v Acronyms and Abbreviations vi Foreword vii Acknowledgments viii Summary ix 1. Background and Program Description 1 2. PROGRESA Seen through an Economic Lens 13 3. The Experimental Design and Information Sources Used to Evaluate PROGRESA 26 4. An Evaluation of PROGRESA’s Targeting and Its Impact on Poverty 34 5. Summary of the Methods Used to Evaluate the Impact of PROGRESA 40 6. A Summary of the Findings of the Impact Evaluation and a Cost Analysis of the Program 48 7. Conclusions and Future Policy Considerations 65 Appendix A: Summary of Mexican Anti-Poverty Programs 68 Appendix B: Characteristics of the Localities in the Evaluation Sample 72 Appendix C: On the Impact of PROGRESA on Poverty 75 References 81 iii Tables 1.1 PROGRESA monthly cash transfer schedule (nominal pesos) 4 1.2 Composition of the basic health services package 5 1.3 Annual frequency of health care visits required by PROGRESA 6 1.4 Micronutrients contained in the food supplements 8 1.5 PROGRESA transfers to beneficiary households from November 1998 to October 1999 (pesos) 10 3.1 Decomposition of the sample of all households in treatment and control villages 29 3.2 Number of households and individual members covered in each survey round 32 5.1 Key outcome indicators and impact estimators used in the quantitative evaluation of PROGRESA 45 C.1 Poverty measures and difference-in-difference tests for total income per capita using canasta basica as poverty line 78 C.2 Poverty measures and difference-in-difference tests for total income per capita using 50th percentile of per capita value of consumption as poverty line 79 iv Figures 1.1 Average cash transfer paid out by PROGRESA by month 9 2.1 Effect of conditional cash transfers on children’s school attendance and work 19 4.1 Percentages of households in treatment localities that receive transfers from other programs and PROGRESA 37 6.1a School enrollment and labor force participation of boys in PROGRESA communities prior to program implementation 49 6.1b School enrollment and labor force participation of girls in PROGRESA communities prior to program implementation 49 6.2a School attendance of children 8–11 years old 50 6.2b School attendance of children 12–17 years old 50 6.3a Incidence of illness for newborns to two-year-olds 57 6.3b Incidence of illness for three- to five-year-olds 57 6.4 Daily visits to public clinics 58 C.1a Mean household total income from childhood (excluding PROGRESA cash transfers) among beneficiary households with children 8–17 years of age 77 C.1b Mean household labor income from children among beneficiary households with children 8–17 years of age 77 C.1c Mean household other income from children among beneficiary households with children 8–17 years of age 77 v Acronyms and Abbreviations CIMO Programa Calidad Integral y Modernizacion CONAFE Consejo Nacional de Fomento Educativo CONASUPO Compania Nacional de Subsistencias Populares COPUSI Programa de Cocinas Polulares y Unidades de Servicios Integrales DICONSA Distribuidora Comercial CONASUPO ENCASEH Encuesta de Caracteristicas Socioeconomicas de los Hogares ENCEL Encuesta de Evaluacion de los Hogares ENIGH Encuesta Nacional de Ingreso-Gasto de los Hogares FISM Fondo para la Infraestructura Social Municipal FONAES Fondo Nacional de Apoyo a Empresas Sociales IFPRI International Food Policy Research Institute IMSS Instituto Mexicano del Seguro Social INI Instituto Nacional Indigenista LICONSA Leche Industrial CONASUPO PASAF Programa de Asistencia Social Alimentaria a Familias PET Programa de Empleo Temporal PROBECAT Programa de Becas de Capacitacion para Desempleados PROCAMPO Programa de Apoyos Directos al Campo PROGRESA Programa Educación, Salud Alimentacion PRONASOL Programa Nacional de Solidaridad SEDESOL Secretaria de Desarrollo Social SEP Secretaria de Educación TORTIBONO Subsidio a la Tortilla vi Foreword n the second half of the twentieth century, many developing countries adopted broad social assistance programs, like food subsidies, ostensibly designed to help poor people. Their ef- Ifectiveness was mixed and, unfortunately, many of these expensive programs did not make much difference in the lives of poor people, much less help them climb permanently out of poverty. In the 1990s Mexico took a completely new approach. It launched a social program— PROGRESA—that was revolutionary in two ways. First, PROGRESA aimed to integrate interventions in health, education, and nutrition simultaneously, based on an understanding that these dimensions of human welfare are interdependent and that poor health, education, and nutrition are both causes and consequences of poverty. Second, PROGRESA was designed from the beginning to be continually evaluated and improved, so that it would become ever more effective at improving the well-being of Mexico’s poorest people. From 1998 to 2000 the International Food Policy Research Institute (IFPRI) assisted the PROGRESA administration in evaluating the program. This research resulted in a series of IFPRI reports, synthesized here, on aspects of PROGRESA’s performance. The evaluation not only highlighted areas of success, but also suggested needed improvements in the program. On the one hand, for example, the research showed that PROGRESA has helped keep poor children in school longer, improved the health of young children and adults, increased women’s use of prenatal care, and improved child nutrition. On the other hand, the evaluation revealed that PROGRESA could have a greater impact on school enrollment by focusing on attendance in secondary schools—the stage at which many poor children drop out. In the election of 2000, the people of Mexico voted a new party into power. Yet, faced with evidence of PROGRESA’s effectiveness, the new government decided to keep the program (renamed Oportunidades) and to make needed improvements in its operation. IFPRI’s research on PROGRESA has advanced our knowledge about policy steps that governments can take to improve the capacities of poor people, who may require interventions in several areas to make real headway in overcoming poverty. In the meantime comparable programs have been tested or implemented in other countries, including Brazil, Honduras, and Nicaragua, and it would be promising to explore their adaptation in African and Asian countries as well. It is our hope that research of this kind will encourage replications, adaptations to country circumstances, and rigorous evaluation of social programs in many developing countries. Joachim von Braun Director General, IFPRI vii Acknowledgments am deeply grateful to Lawrence Haddad, director of the Food Consumption and Nutrition Division of IFPRI, for providing me the opportunity to lead the PROGRESA evaluation. IAs a team leader I had the honor and pleasure to work closely with all the members of the superb IFPRI-PROGRESA research team and affiliated institutions. Specifically, the IFPRI team members include Dr. Michelle Adato, Dr. David Coady, Dr. Benjamin Davis, Dr. Béné- dicte de la Brière, Dr. Sudhanshu Handa, Dr. Rebecca Lee Harris, Dr. John Hoddinott, Dr. Agnes Quisumbing, and Dr. Marie Ruel. Habiba Djebbari, Ryan Washburn, and Lyla Kuriyan provided excellent research assistance, while Lourdes Hinayon and Bonnie McClafferty provided superb administrative and editorial support. A number of academics from U.S. and Mex- ican universities have also played a critical role in the design and implementation of the PRO- GRESA evaluation. These include Professor Jere Behrman (University of Pennsylvania), Professor Paul J. Gertler (University of California, Berkeley), Professor T. Paul Schultz (Yale University), Professor Petra E. Todd (University of Pennsylvania), Dubravka Mindek (Escuela Nacional de Antropología y Historia), and Professor Graciela Teruel (Universidad Iberoamer- icana). Finally, I acknowledge my deep gratitude to the late director of the PROGRESA program, Dr. José Gómez de León, and to the members of his wonderful team: Daniel Hernan- dez, Monica Orozco, Patricia Muniz, Humberto Soto, Sergio de la Vega, Mari-Carmen Huerta,

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