PROGRESA Presentation

PROGRESA Presentation

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I will be introducing PROGRESA, going over the benefits, the costs or the cash transfer schedule. Evaluating the demand and supply side interventions and conclusion.

Introduced by the federal government of Mexico in 1997. Before Progresa, poverty was so severe, especially in rural areas, that a third of the Mexican people could not afford adequate food. Unlike other earlier social programs in Mexico, PROGRESA contains focuses on 3 objectives. Improve the educational, health, and nutritional status of poor families.

For my final paper I’m only looking at the education component.

SO. Cash transfers are given to mothers every two months and all children between 7 and 18 years of age are eligible for these subsidies.

To receive the grant, parents must enroll their children in school and ensure regular attendance (maintain a minimum attendance rate of 85% both monthly and annually)

Slide 2
Benefits of education are enormous, but just to name a few:

More specifically:

By making it a part of their policy to give the grants only to the women of the family, progresa aims to increase the power and status of women in their families and communities through the regular source of cash

Slide 3
Graph shows the school enrollment and labor force participation of boys before PROGRESA.
Mexico’s children typically maintain a high enrollment rate in primary school of about 93%. But for the rural poor, education stops there. They begin dropping out of school after completing the sixth grade when enrollment rates decline to 55 percent.

Slide 4
The same is the case for girls. Even though labor participation rate of girls is pretty low prior to program implementation, it increases at the same time as the school enrollment rates drop.

Slide 5
Cash transfer schedule lists the benefits that are given out every 2 months. The monthly amount varies by age and sex of the child.

In poor areas of Mexico, girls tend to drop out earlier than boys. In order to reverse this tendency, PROGRESA grants were structured to be about 15 percent higher in the secondary school level for girls.

The most critical objective of PROGRESA’s education program is to increase the transition of poor rural youth into secondary school (grades 7-9). Because of which, educational grants for enrolling in the first year of junior secondary school increase by 75 pesos in the case of boys and 85 pesos in the case of girls.

Slide 6:
After a number of studies and statistical tests, it was concluded that in all cases PROGRESA had a positive enrollment effect for both boys and girls at the primary and secondary level.

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At the primary level, where enrollment rates before PROGRESA were between 90 and 94 percent, PROGRESA succeeded at increasing the enrollment rate of boys by 0.74 to 1.07 percentage points and of girls by 0.96 to 1.45 percentage points.

Slide 7
Similarly at the secondary level the impact was much greater. enrollment rates increased by 7.2 to 9.3 percentage points for girls. And 3.5 to 5.8 percentage points for boys.

Slide 8
They also found that the student-teacher ratio increased in 1998 and then decreased in 1999, indicating that schools were being at the time as well. Data showed that 12 new schools were built between 1997 and 1999, leading to a decrease in the average distance to the nearest secondary school from 2.02 km in 1997 to 1.95 km in 1999. Using the coefficients on distance from the regression analysis, the prediction is that this resulted in an average enrollment impact of 0.75 percentage points for girls and 0.45 percentage points for boys.

Slide 9
Given the difficulty of attaching a monetary value to measuring education. The effectiveness indicator is the extra years of schooling that was created. Using the impact, total level of grant and number of children enrolled gives us the cost of generating an extra year of schooling.
A few major points:
Cost per extra year is much higher for boys than girls on primary school, reflecting the higher enrollment impact for girls.
In secondary schools, we find the same pattern. Though the higher enrollment effect for girls offsets their higher subsidy rates.
Also cost per year across primary and secondary school is higher in primary than in secondary because the effect of higher subsidies is offset by a higher enrollment impact.

Slide 10
Table presents the cost effectiveness ratio i.e the cost of generating an extra year of education through extensive expansion of the school system. The lowest cost is for a forty-year period for girls’ enrollment with zero discounting at 110,000 which is much greater than the average subsidies 19 thousand for primary school and 10 thousand for secondary school.

The cost decreases the longer one assumes the extensive supply effect to last, reflecting the up-front infrastructure costs are spread over a longer period.

The cost is lower for girls than for boys, reflecting the larger effect of lower distances on girls enrollment relative to boys

Comparing the costs of demand and supply side interventions show that PROGRESA is by far more cost-effective than building more schools, if the objective is getting more children into school.

However, the biggest downside is that a) PROGRESA is only implemented in localities that already have access to health clinics and schools, and b) it does little to actually improve the quality of education.

-Receipt of monetary transfers for the purchase of food and nutritional supplements is tied to mandatory health visits to public clinics.
-Nutritional supplements are given to children between ages of 4 months and 2 years, and to pregnant and breastfeeding women.
-Difference estimator: for each grade, calculates the difference between the mean conditional enrollment rates in the control and treatment samples in the 1998 ENCEL data.
-effectiveness indicator: extra completed years of education. Assumption is that an extra year of enrollment leads to an extra year of completed schooling.
- statistical methods that control for the age and family background of children as well as community characteristics revealed that

Evaluation survey
Sample used in the evaluation od PROGRESA consists of repeated observations collected from 24,000 households from 506 localities. Collected between November 1997 and November 1999.
Of the 506 communities, 320 = treatment and 186 = control.
Conducted formal survey, structured and semi-structured obervations, interviews, focus groups, workshops with local leaders, local and central PROGRESA officials, health clinic doctors, nurses and assisants and school teachers.
Novermber 1997, PROGRESA conducted surveys of the socioeconomic conditions of rural mexico households to determine which households were eligibile. 78% were eligible. Additional information on all individuals was in March 1998 before the first distribution of benefits in May 1998. These two surveys provide the baseline observations for all households before the initiation of the distribution

Baseline data, ENCASEH 1997. 1998 Encel data.

Using cost-effectiveness ratios i.e the cost incurred in generating an extra year of schooling

-Under PROGRESA, communities are first selected using a marginality index based on census data. Then, within selected communities, households are chosen using socioeconomic data collected for all households in the community.

-The cost decreases with the discount rate, reflecting the fact that a greater proportion of the enrollment is distributed further in time relative to costs.

-November 1997 PROGRESA conducted a census of socioeconomic conditions of rural Mexican households [ENCASEH] in the evaluation communities to see which households would be eligible for benefits. Based on PROGRESA’s beneficiary selection methods, households were classified as eligible and non-eligible for participation in both treatment and control communities.
Additional information on all individuals was collected by the first evaluation survey which took place in March 1998 ENCEL.

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