April, 2013 SOUTH-SOUTH LEARNING ON CCT TRAINING WORKSHOP

LAURA DÁVILA LÁRRAGA

TARGETING AND

BENEFICIARIES SELECTION

EXPERIENCE IN MEXICO’S

“OPORTUNIDADES”

Content

• Oportunidades at a glance

• Mexico’s Regulations on poverty

• Selection of beneficiary households: multi-level targeting

• Oportunidades’ Geographic Targeting

• Collection of household data

• Proxy means test

• Oportunidades’ incorporation criteria

• Oportunidades’s recertification strategy

• Graduation Strategy

• Some lessons learned

Oportunidades at a glance (1)

• Oportunidades has been one of the key pieces of the Mexican

Federal Governement’s targeted social policy since 1997

(formerly called “Progresa”).

• The responsible for its implementation is the National

Coordination of Oportunidades, a specialized and decentralized

agency of the Social Development Ministry, with technical

autonomy.

• The program provides bimonthly cash transfers to 5,845,056

households 1 (slightly more than 25% of the Mexican population).

• The budget allocated to the Progam in 2013 is 66,132 million

Mexican pesos 2 (around 5.3 billion USD3).

1. Source: http://www.oportunidades.gob.mx/Portal/wb/Web/historico_cobertura_municipios_localidades

2. Source: http://www.diputados.gob.mx/LeyesBiblio/pdf/PEF_2013.pdf (p. 94)

3. Exchange rate: 12.45 MXP = 1 USD

Oportunidades at a glance (2)

Oportunidades aims to contribute to the interruption of

the intergenerational transmission of poverty,

promoting investment in the human capital of the

beneficiary households1.

Development

goal

1. Source: 2012 Oportunidades’ Operating Guidelines (p. 3)

2. Source: 2012 Oportunidades’ Operating Guidelines (p. 4)

Beneficiary

target group

Households whose socioeconomic and income

conditions prevent increase the potential of their

members to build capacities in three dimensions:

education, nutrition and health2.

Mexico’s Regulations on poverty (1)

• The “General Law on Social

Development” states that the guidelines

and criteria issued by the National

Council for the Evaluation of the Social

Development Policy (CONEVAL) to

define, identify and measure poverty

are mandatory to any Mexican institution

that implements social development

policy, programs and actions.

• CONEVAL should use information

generated by the National Institution of

Statistics and Geography (INEGI), and

the poverty measurement should include,

at least, the following indicators:

1. Current per capita

income

2. Educational gap

3. Access to health

services

4. Access to social

security

5. Quality and spaces

of the dwelling

6. Access to basic

services in the

dwelling

7. Access to food

8. Degree of social

cohesion

Population in multidimensional

poverty

Population in EXTREME

multidimensional poverty

Mexico’s Regulations on poverty (2)

Source: http://www.coneval.gob.mx/rw/resource/coneval/med_pobreza/MPMMPshortversion100903.pdf

In 2010, nearly 50% of Mexican

population were classified as poor

and 10% as extreme poor.

Selection of beneficiary households: multi-level targeting

Localities selection:

Geographic targeting

Socioeconomic and

demographic information:

Collecction of data at the household level

Households Selection:

Proxy means test applied to each household survey

List of Beneficiaries:

Incorporation criteria

MUNICIPALITIES

Oportunidades’ Geographic Targeting

STATES LOCALITIES

PROPORCIÓN DE HOGARES POBRES

Sin datos

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Del 20 al 39.99%

Del 40 al 59.99%

Del 60 al 79.99%

Del 80 al 100 %

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BLOCKS

BASIC

GEOSTATISTICAL AREAS

The operation of the Programa relies on the official information

provided by the National Institute of Geography and Statistics, at

the locality level. In line to its priorities, Oportunidades uses: the

Marginality Index, the Social Gap Index and information about the

accesibility to health and education services.

Collection of household data

• Oportunidades’ trained staff interview a member of each

household (aged 15 years or older). The same questionnaire is

applied nationally and directly in their homes.

• A mobile device is used for the data collection. It is programmed to

follow the sequence of the interview and validate some data.

• In urban areas a brief questionnaire is applied as a filter which

determines to continue or not with the complete questionnaire.

• The complete questionnaire includes variables related to:

demographic, disability, health, education, and labor characteristics

of each household member; expenditure and consumption, food

security, land, animal and goods ownership; type of dwelling and

access to basic services. Besides, there is a visual verification at

home.

Proxy means test (1)

• There are two linear regression models to target beneficiaries

(urban and rural). They were estimated using data from the 2008

National Survey of Households' Income and Expenditure.

• In both models the dependent variable is the same income used

by CONEVAL for measuring poverty (official figures), but

excluding cash transfers from social programs. The explanatory

variables are related with structural poverty.

• This targeting methodology was implemented in 2010 and it is

applied at the central level using data collected by the household

questionnaire, including the visual verification information.

Proxy means test (2)

• The estimated income is compared to an estimated Minimum

Wellbeing Threshold (MWT) to select beneficiaries. The rural

threshold was around $52 USD while the urban was set around

$89 USD.

• With data from 2008, 4.5 million of households were allocated

below the estimated MWT; 2.12 in rural areas and 2.38 in urban

areas.

• In the rural model, 76% of the households are correctly

identified; in the urban model, 88%. The exclusion/inclusion error

in rural areas is 31% while in urban areas is 52%.

Oportunidades’ incorporation criteria

• Validation that targeted households have effective access to

health and education services (inter-sectoral coordination of the

Program at the three governmental levels).

• If a household has an estimated income below the Minimum

Wellbeing Threshold (MWT) some priority criteria is applied in

order to incorporate them to Oportunidades:

• Households with members under 22 years.

• Households with at least one woman in reproductive age (15-

49 years).

Oportunidades’s recertification strategy (1)

1.16 MH

1.16 MH

1.16 MH

1.16 MH

1.16 MH

2011 2012 2013 2014 2015 2023 2016 2017 2018 2019 2020 2021 47,000

locs

17,000

locs

14,000

locs

9,000

locs

8,000

locs

Recertification cycle Recertification cycle

The socioeconomic and demographic questionnaire is applied nationally

and at the household level (within the selected localities)

The proxy means test is applied to the data collected

As result of the recertification process, the household:

Continues to be eligible for the Program (estimated income below

the MWT),

Is eligible for a Differentiated (reduced) Scheme of Benefits

Is ineligible (above the cut-off point), therefore is dropped

(“graduated”) from the Program

EDA (RSB)

With children under 22 years or women

under 50 years

Without children Until the youngest woman turns 50

years old

EXIT THE PROGRAM

With children in school

Until the youngest finishes high school

EXIT THE PROGRAM

With children not in school

Up to 2 years in order to return to

school

EXIT THE PROGRAM

Without children under 22 years and women under 50

years

EXIT THE PROGRAM

Oportunidades’s recertification strategy (2)

Households eligible to continue receiving the complete or reduced

scheme of Program benefits will remain as beneficiaries while they

meet their co-responsibilities.

Oportunidades’s recertification strategy (3)

• From 2000 to 2006, the recertification strategy do not dropped

households as a result of the data analysis: 4.2 million households were

recertified, 9% were transited to the Reduced Squeme of Benefits (RSB)

and of these, 50% drop out before the defined period.

• From 2007 to 2010, with the previous recertification strategy: 3.18

million households were recertified, 7% transited to the RSB and 5%

were dropped (or “graduated”) from Oportunidades.

• In 2011, with the current recertification strategy: 1.1 million households

were recertified: 20% transited to the RSB and 31% were dropouts.

Graduation Strategy

RSB (*)

Minimum

WT

Beneficiaries

threshold

Wellbeing

Threshold

(WT)

CONEVAL

$1,921.74

(154 USD)

Oportunidades

CONEVAL

Exchange rate: 12.45 MXP = 1 USD

$2,088.25

(168 USD)

$874.63

(70 USD)

$613.80

(49 USD)

Oportunidades

BEN

EFIC

IAR

IES

$1,202.80

(97 USD)

$1,111.54

(89 USD)

$ 643.05

(52 USD)

EXIT

BEN

EFIC

IAR

IES

RSB (*)

EXIT

$1,395.87

(112 USD) $1,036.33

(83 USD)

Drop-out

threshold

* Demographic criteria is applied

Some lessons learned (1)

• Living conditions of households are different in rural and urban

contexts. The Program uses two different models to take this into

account and improve its targeting results, mainly in urban areas.

• Although discriminant analysis and the logit model allow classify

households according to their poverty condition, linear regression

allows to adjust the cut-off line without re-estimating the model. It

also allows its application using different thresholds and adjust it

for inflation.

Some lessons learned (2)

• According to some related studies, improvements in the

socioeconomic conditions of households can hardly be reflected

within a short term period and this also depends on the overall

context of the locality.

• In terms of operation, it is more complicated and more costly

carrying out the recertification process by the incorporation

phase of the household, than at the locality level (according to a

strategic planning, a locality should be “recertified” every five

years).

Laura Dávila Lárraga

Consultant

lauradavilalarraga@gmail.com

Oportunidades website:

www.oportunidades.gob.mx

(Spanish and English version)

SOUTH-SOUTH LEARNING ON CCT TRAINING WORKSHOP

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