Americas Quarterly - Spring 2009

Mexico’s Fragile Middle Class Florencia Torche

soles ( approximately $30). Those payments are conditioned on mothers’ meeting certain criteria for their children, such as improving school attendance, providing nutritional supplements, immunizing their children, and registering them with the state.

In three years, the number of JUN TOS beneficiaries has nearly quadrupled. According to UNICEF, JUNTOS has increased vaccination rates of children one year old and under

juntos is now fundamental to peru’s poverty-fighting plans.

by 30 percent. The number of doctor’s visits by children under five soared 200 percent between 2005 and 2006 alone—and those numbers are certain to have increased since the UNICEF study.

As an indication that the program is now fundamental to Peru’s poverty-fighting plans, President García included it in the

Estrategia Nacional Crecer (National Growth Strategy)— the country’s keystone anti-poverty and health improvement program.

Institutionalization is the true mark of success: by incorporating it into the government’s plan, JUN TOS is bound to play an even more significant role in tackling Peru’s chronic intergenerational transfer of poverty.

to stay in school longer. Such a so-called “ substitution effect” occurred during the Great Depression, and led to the massive, and somewhat unexpected, expansion of educational attainment in the United States. Although research in the developing world suggests that the negative income effect could outweigh the positive substitution effect, particularly among poor families, the net outcome depends on the characteristics of the crisis and on the government’s response.

One of these characteristics is that the current crisis originated in the U.S., Mexico’s largest trading

partner and the receiving country of a large share of its unskilled work force. Should a portion of those migrants return home to look for jobs, the attraction of the labor market will diminish for school-age youth. This could increase the likelihood of a positive substitution effect.

The length of the crisis is also an important factor. If the crisis persists over time—a likely scenario in current circumstances—families may exhaust alternative resources and may need to pull children out of the educational system. Finally, the responses to the crisis may vary across gender. Studies of household responses to the 1995 peso crisis suggest that the coping strategy first used by households was to increase female labor force participation. As a result, household tasks formerly taken by wives fell on daughters (but not on sons), resulting in a decline in girls’ school attendance. The still relatively low rate of female labor force participation in Mexico suggests substantial room for this intra-household strategy in the current crisis and highlights the importance of focusing on girls’ educational attainment.

And this is where government action can have an immediate and powerful effect.

Theory and empirical research indicate that despite the risks, the economic crisis in Mexico may in fact provide a window of opportunity for educational attainment and thus for social mobility. To accomplish this, the Mexican government must seek to provide targeted assistance to ensure that families keep their children in school. The best tool for this is the widespread, and well-managed, conditional cash transfer program Progresa/Oportunidades.

Launched in 1997, the Progresa/Oportunidades program provides cash transfers to families in exchange for regular school attendance, health visits and nutritional support. By 2006, around one-quarter of the Mexican population participated in the program. By taking advantage of the Progresa/Oportunidades platform, the Mexican government can prevent families under economic distress from taking children out of school. The role of the government becomes critical for children further up the educational ladder, particularly at the high school (preparatoria) level, as their potential economic contribution increases with age.