Mexico’s biggest anti-poverty strategy is based on paying families to keep their children in school. The Prospera program – formerly Opportunidades – targets the country’s poorest families for incentivised benefits tied to school attendance, vaccinations or trips to the doctor. Prospera has increased school attendance by 20% among girls and 10% among boys, and has significantly improved child health. Payments start at about $10.50 per month for children in the third grade of primary school and can be as high as $58 for boys and $66 for girls in the third year of secondary school.
Results & Impact
Evaluations indicate that girls involved in the program had a 20% higher chance of attending school than those who did not, and boys had a 10% higher chance. Children on the program reportedly had a 12% lower incidence of illness than those not enrolled.
World Bank, the Government of Mexico
Opportunidades targeted families living in extreme poverty, identifying them through a “marginality index” drawn from census data. Later, the Prospera program expanded the conditional cash transfers to less marginalised communities by extending the census-based identification system. Grants exceeding $60 a month are available to families with children under 22 who are enrolled in full time education. Additional payments are made to incentivise families to vaccinate their children and take them for medical check-ups.
General public, low-income people, students, children
Cost & Value
Payments start at about $10.50 per month for children in the third grade of primary school and can reach up to $58 for boys and $66 for girls in the third year of secondary school.
Running since 1997
The program has inspired other schemes in Latin America, including Brazil’s Bolsa Familia. An attempt to establish a similar project in New York spearheaded by Mayor Michael Bloomberg, however, was abandoned after three years in 2010.
Mexico has addressed rural poverty and improved the educational opportunities of poorer young people by giving cash incentives to families that keep children in school.
The Prospera program — formerly PROGRESA and Opportunidades — is a national conditional cash transfer scheme. It gives families small amounts of cash in exchange for them meeting key goals in family welfare, such as sending their children to school, getting them vaccinated against illness, and sending them to regular medical check-ups.
Running in various permutations since 1997, the program is Mexico’s primary poverty reduction strategy. It accounted for 46.5% of the country’s annual anti-poverty budget — and has helped an estimated five million families. Evaluations indicated that boys involved in the program had a 10% higher chance of attending school, and among girls that number rose to 20%.
The principle behind these Conditional Cash Transfer (CCT) schemes is simple. Incentivising education helps poor families invest in human capital, better preparing young people to participate in the economy. As well as addressing immediate poverty, the programs tackle long-term deprivation by empowering the next generation with what they need to be socially mobile.
Many of the families the programs target already want to invest in their children’s future. But education can be pricey, and when children attend school rather than work the family loses out on precious earnings. In Mexico, this is demonstrated by dropout rates and ages. Surveys suggest that at age 11 up to 92% of rural Mexican children are still in school, but when those children are 15 the rate drops to 36%, and at 17 only 26% are in school. Correspondingly higher numbers of young people report being in some kind of work.
In the Opportunidades program, monthly grants to the families of students increased depending on how long the child had been in school, and were adjusted to maximise the impact on other inclusive economy goals. Opportunidades targeted families living in extreme poverty, identifying them through a “marginality index” drawn from census data. Later, the Prospera program expanded the conditional cash transfers to less marginalised communities by extending the census-based identification system.
Grants are available to families with children under the age of 22 who are enrolled in full time education. Payments range from about $10.50 for children in the third grade of primary school to $58 for the third year of secondary school. Girls receive even more, $66 each month, because their dropout rates tend to be higher.
Additional payments are made to families who vaccinate their children and take them for medical check-ups. Children on the program reportedly had a 12% lower incidence of illness than those not enrolled.
By tying relief to educational participation and health, the program raises families’ awareness of how they can improve their children’s prospects, guaranteeing they will do so. The project began life as a pilot involving 300,000 families, with a budget of $58.8 million. With each name change it has evolved further. When it became Prospera in 2014, for example, it was extended from primarily rural to urban areas, and expanded to reward participation in employment schemes and extracurricular school activities. The program now covers some 24% of Mexican citizens, who receive an average of $130 a month from the program.
Conditional Cash Transfer (CCT) programs like these are not just limited to Mexico. Brazil’s Bolsa Familia is arguably the most extensive and successful of all its initiatives, and has more beneficiaries than any other conditional cash transfer program in the world. It gives families with income below a certain level a stipend for children who are vaccinated against certain diseases, or who are enrolled in school.
An attempt to set up a similar program in New York, however, was abandoned after a three year pilot. Whereas programs in Latin America incentivised attendance the American iteration rewarded achievement — but failed to deliver a significant improvement in grades among the young people targeted by the program.