Why do the poor leave the safety net in Mexico? A study of the effects of conditionality on dropouts

Abstract

This paper analyzes the characteristics of beneficiaries that drop out of the Mexican conditional cash transfer program Oportunidades to determine if dropping out of the program is a result of selftargeting by the non-poor, the exclusion of the target poor population or a combination of both. The analysis, which uses a duration model, indicates that it is the wealthier beneficiaries that have greater odds of dropping out suggesting that conditionality acts as a screening device. Results also indicate that administrative factors and the particular provider of health services to beneficiaries have an important influence on dropouts.