f_0022081_18198 - #$#$%$"0*1#$%2 $(3*4%2.$#$#0,3%2 5.6&$#$...

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! #$%&’(% *(+%, (- % ./010 -2&’3+2 %2 2/3 45/66$ 67 .&8$(5 .6$(5, %2 2/3 9+(:3;-(2, 67 <%;,$%+’= >/3;3 -/3 765&-3- 6+ ?6:3;2, ;3’&52(6+ %+’ -65(%$ ?;62352(6+ ?6$(5(3- %+’ ?;[email protected];%A-0 4/3 5%+ 83 ;3%5/3’ %2 5:(+%,B&A’03’& 0 ! " $ "%!&’&"%() $ (*+ ,(%*-.,* & %$,.(*. / "", + "0*.+")!* 1 $ "/&%2 $ (/(3&)&’&.* 4 ( **.**&%2 ’+. . --.$’ "- ! "!#$%&’()(*+ &% / "", 0 ,3(% * .’’&%2* &% 5 .6&$" #$%&’(% *(+%, This paper examines whether Mexico’s conditional cash transfer (CCT) program, Oportunidades , has an effect on poor urban households’ coping decisions when faced with an idiosyncratic shock. Poor households are often uninsured and thus have lim- ited risk coping capabilities. While evaluations have found the program to have a positive effect on outcomes such as school enrollment and health seeking behavior, they have primarily focused on rural areas and not examined whether the program helps urban households cope with risks. This paper explores the effect of Oportunidades on poor, urban households’ risk- coping strategies by using the latest External Urban Household Evaluation Survey (ENCELURB). The results indicate that the program does not have a strong or consistent effect on the decisions households make when faced with a negative idiosyn-
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!!C cratic shock. Rather, household characteristics seem to be more important. The paper concludes with policy recommendations and areas for future research. !" ! $%&’()*%!’$ In the past decade, conditional cash transfer programs (CCTs) have become increasingly popular in Latin America and other developing countries as the keystone of poverty-reduction strategies. One of the most widely recognized programs of this type is the Oportunidades program in Mexico, which has been in operation since 1997 (originally under the name Progresa ). Through this program, the government provides a periodic cash amount to the mother (or female head) of poor households who engage in certain pre-specified behaviors deemed socially desirable, including sending their children to school and taking them to receive regular health check-ups. Oportunidades has been heavily evaluated on the dimensions of efficiency and effectiveness and has been shown to have a positive impact on school enrollment and the health of beneficiary children, among other outcomes. 1 However, further exploration is needed to understand the effectiveness of Oportunidades and other conditional cash transfer programs in not only helping poor households get out of poverty, but also stay out of pov- erty. Negative idiosyncratic shocks, for instance, often require significant financial resources and pose one of the hardest blows to a poor household’s stability and fragile income. Since most families receiving cash transfers are uninsured (Lustig 2000; World Bank 2005), they have very limited ability to save and the services they receive are often very basic. These families are often not prepared to finance a funeral, rebuild a house or business after a fire, or cope with extended periods of unemployment. It can take years for these households to recover from the expenses required to face these shocks. It could also have an impact on the accumulation of human capital if children have to be taken out of school to work and contribute to the family income.
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