Does the Impact of Oportunidades Program Increases in Highly Competitive Regions?
| Autor | Marcos E. Domínguez Viera |
| Páginas | 79-111 |
Ensayos Revista de Economía–Volumen XXX, No. 2, noviembre 2011, pp. 79-111
Marcos E. Domínguez Viera
Fecha de recepción: 11 XI 2010 Fecha de aceptación: 7 II 2011
Abstract
Evidence on Oportunidades, a successful anti-poverty program in Mexico,
has suggested that changes to the current grant structure may induce
considerable improvements to its effectiveness. Moreover, there are
proposals addressing the importance of regional, observable and
unobservable characteristics, regarding its implementation. It is employed
competitiveness level outcomes to investigate if this social policy has
heterogeneous performance in different regions of intervention. For this
purpose, a Difference-in-Difference model is applied to estimate short and
mid-term impacts on enrolment rates. Results indicate that the general
competitiveness effect is positive but not robust, given the considerable level
of aggregation of the data used, whereas if it is distinguised Oportunidades
treatment by selected competitiveness outcomes, states with highly efficient
government institutions, middle competitive economic sectors and middle
inclusive, educated and healthy individuals, present a larger program impact
on enrolment rates. It is confirmed the significant improvements to program
effectiveness and the impact of the competitiveness variables when it is
considered only a sample of older children.
Keywords: Social policy effectiveness, competitiveness outcomes, school
enrolment rates, regional effects, difference-in-difference (DID) model.
JEL Classification: C33, D61, I38, R59.
Gobierno del Estado de Nuevo León.
Email: marcos.dominguez@nuevoleon.gob.mx
I am grateful to my dissertation advisor at the University of Essex, Dr. Matthias Parey, for
his helpful advice on the original version of this work, and to anonymous examiners and
other researchers for their valuable comments on earlier dr afts.
Ensayos Revista de Economía
80
Resumen
La evidencia sobre Oportunidades, un exitoso programa de combate a la
pobreza en México, sugiere que cambios sobre la estructura actual del
otorgamiento de becas podrían incrementar la efectividad del mismo.
Inclusive, existen propuestas acerca de la importancia de características
observables e inobservables relacionadas con su implementación. En este
trabajo, se emplean variables que miden el nivel de competitividad para
investigar si esta política social presenta un desempeño heterogéneo en
diferentes regiones de intervención. Con este fin, se utiliza un modelo de
Diferencias-en-Diferencias (DID, por sus siglas en inglés) para estimar
impactos de corto y mediano plazo sobre las tasas de inscripción escolar, y
los resultados indican que el efecto del nivel general de competitividad es
positivo pero no robusto, debido al nivel considerable de agregación de los
datos utilizados; en cambio, si diferenciamos el tratamiento de
Oportunidades, a través de indicadores seleccionados de competitividad,
estados con instituciones de gobierno altamente eficientes, sectores
económicos de mediana competitividad y sociedades con nivel medio de
participación, educación y salud, se observa que presentan un mayor impacto
sobre las tasas de inscripción, como consecuencia del programa. Así mismo,
se confirma una mejora significativa en la efectividad del programa y el
impacto de las variables de competitividad, cuando se considera una muestra
de beneficiarios de mayor rango de edad.
Palabras Clave: efectividad de política social, indicadores de
competitividad, tasas de inscripción escolar, efectos regionales, modelo de
diferencias-en-diferencias (DID).
Clasificación JEL: C33, D61, I38, R59.
Introduction
The Human Development Program Oportunidades1 is one of the largest anti-
poverty programs in Mexico. It was started by the Government in 1998 (at
this stage called Progresa2) in the rural Mexico and was expanded in 2002 to
cover the urban areas. This Conditional Cash Transfer (CCT) tries to
ameliorate the long-run effects of poverty providing grants to children and
youth Mexicans, with the main objective to increase investments in human
capital.
1 In what follows, Oportunidades is the program that in general will be refered to and
Progresa denotes only rural-areas component.
2 It comes from the Spanish acronym on “Program on Health, Education and Nutrition”.
Does the Impact of Oportunidades Program Increases in Highly Competitive…?
81
Several works have confirmed the significant effects of Oportunidades over
outcomes such as household investment decisions (Gertler, Martinez and
Rubio-Codina, 2006) school participation (Behrman, Gallardo-García,
Parker, Todd and Vélez-Grajales, 2010; Parker, Todd and Wolpin, 2006;
Attanasio, Meghir and Santiago, 2009) migration (Azuara, 2009),
consumption (Angelucci and De Giorgi, 2009; Angelucci and Attanasio,
2009). Nevertheless, some authors as Attanasio and Rubio-Codina (2009)
have suggested that this program has marginal impacts on attendance to
primary school in rural Mexico, given the considerable child participation in
lower stages of education even in the absence of this intervention. Thus, is
argued that a re-allocation of the resources should have to be applied to
impulse its effectiveness in further levels of education (e.g. secondary
school). Furthermore, Attanasio, Meghir and Szekely (2003) evaluated if
potential results of Progresa in some Mexican states can be extrapolated to
other regions, thereby providing evidence about the importance of
considering different contexts in the implementation of government
interventions.
Bearing the above information, the main goal of this paper is analyse if
differentiating the treatment of Oportunidades by regional levels of
competitiveness, improves the impact of the program on enrolment rates of
its beneficiaries in urban areas. It is argued that a more competitive
environment that guaranties, among others, the sufficient conditions of
infrastructure such as high quality schools and health clinics, skilled human
capital, a well-developed and structured labour market, and an efficient
government provides outstanding conditions for the program to work
efficiently. In order to investigate the specific mechanism of influence, it is
selected three sub-indices from a Mexican competitiveness index into the
following three groups: individuals, enterprises and government institutions.
The proposal is that the impact of Oportunidades may differ across regions
depending on the general level of competitiveness, the education of the
population -representing a measure of how competitive individuals are- the
economic sectors competitiveness -for the enterprises’ competitiveness- and
the government efficiency.
The literature about competitiveness is restricted to the analysis about its
determinants, as in the contributions of Dzeng and Wang (2008) and
Marginean (2006); and the effects of different outcomes on it, as in Aldy and
Pizer (2009) and Anger et al. (2007). However, to my knowledge, there is no
evidence about the competitiveness impact on social policies performance.
Similarly, evidence on the effects of individuals’ level of education is related
to human capital spillovers on co-workers earnings and productivity, as it is
pointed out in Battu, Belfield and Sloane (2003) and Navon (2009), and
Ramos, Suriñach and Artis (2009). The famous studies of Hall and Jones
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