Leaving the Safety Net: An Analysis of Dropouts in an Urban Conditional Cash Transfer Program

In poverty reduction programs, a significant number of beneficiaries change program status. An analysis of Oportunidades’ data from urban Mexico shows that beneficiaries that drop out for behavioral and administrative reasons are those who are marginally eligible, improving targeting through minimizing errors of inclusion. Results also indicate that the very poorest recipients, particularly in large urban areas and less marginal communities, are more likely to drop out, increasing the errors of omission. Households deemed ineligible through a recertification process were those that had obtained basic durables or changed their demographic composition implying that Oportunidades’ retargeting is based on limited information.