Skip to main content
SpringerLink
Log in

Outlook of the Mexican Economy, Poverty, and Vulnerability

  • Chapter
  • First Online:
Household Vulnerability and Conditional Cash Transfers

Part of the book series: SpringerBriefs in Economics ((BRIEFSKUSSRS))

  • 372 Accesses

Abstract

Mexico is a leading economy among the countries of Latin America and the Caribbean (LAC). It has made the most of globalization in its economic development process, for instance, through the North American Free Trade Agreement (NAFTA), which came into force in 1994. Mexico has implemented various poverty-reduction policies that have now converged into what is reputedly the first conditional cash transfer (CCT) program in the world. In spite of all these efforts, Mexico continues to suffer from high incidence of poverty and inequality, and has experienced an unexpected upsurge in poverty since 2006 amid the international food price crisis and the global economic crisis in 2008. This chapter summarizes the concepts of poverty and vulnerability. Additionally, it presents a macroeconomic and poverty outlook for Mexico, contrasting it with the LAC average. Moreover, the chapter briefly explains the Mexican CCT program, PROGRESA-Oportunidades, thereby providing an introduction for the discussion in subsequent chapters.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
eBook
USD 16.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 16.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    SDGs have 17 goals and 169 targets for the year 2030 in a broader scope than the MDGs ranging from poverty eradiation, inequalities, economic growth, decent jobs, sustainable environment and climate change, and peace and justice. The SDGs were adopted by all the member countries at a UN Summit in 2015 and thus apply to all the countries, both developed and developing, in the world, whereas the MDGs were targeted only to developing countries. See United Nations (2015b) for the details of the SDGs.

  2. 2.

    The calculations are based on the poverty and middle class lines (per capita income below US$4 and between US$10 and US$50, respectively) defined by the World Bank (2012). The thresholds and incomes are all expressed in 2005 purchasing power parity (PPP).

  3. 3.

    World Bank (2013) reported that the region still has some 82 million people living on less than $2.5 per day.

  4. 4.

    The international poverty line was revised in 2008 based on results of the International Comparison Program (ICP) 2005, a worldwide statistical initiative to collect comparative price data and estimate purchasing power parities (PPP) of the world’s economies (World Bank 2008). The poverty line was raised from US$1.08 (at 1993 PPP) to US$1.25 (at 2005 PPP). Therefore, a simple term “US$1 per day per person” is also used in many cases for the sake of convenience. See Chen and Ravallion (2008, 2010) for details of the re-estimation of world poverty using the revised poverty line. As of October 2015, these poverty lines were re-estimated to US$1.9 and US$3.10 per day per person using the PPP in 2011 in order to keep updating the different cost of living across the world. The World Bank insists that only minor changes in the poverty ratio have been observed attributable to this adjustment. See the World Bank’s websites for detail: https://blogs.worldbank.org/developmenttalk/international-poverty-line-has-just-been-raised-190-day-global-poverty-basically-unchanged-how-even (Accessed on June 1, 2016).

  5. 5.

    Alwang et al. (2001) define poverty as “the propensity to suffer a significant welfare shock, bringing the household below a socially defined minimum level.”

  6. 6.

    We would overstate household well-being in good years and understate it in bad years if we were to use income as the measure of welfare.

  7. 7.

    2015 Human Development Statistical Tables: http://hdr.undp.org/en/composite/HDI (Accessed on April 19, 2016).

  8. 8.

    The neoliberal reforms in Mexico consisted of macroeconomic stabilization, trade liberalization, capital and financial liberalization, privatization, deregulation, tax reform, reduction in public expenditures, and so on (Uchiyama 2007).

  9. 9.

    With respect to trade liberalization in Mexico, the (weighted) average tariff rates decreased from 23.5% in 1985 to 12.5% in 1990. The coverage of import licenses dropped from 92.2% to 19.9% in 1990 (Feliciano 2001). Furthermore, all tariffs on imports from the NAFTA member countries, except for a small part of “sensitive” agricultural products, were abolished instantaneously when NAFTA came into force (Hamaguchi and Nishijima 2007).

  10. 10.

    See, for example, Table 1 of ECLAC (2013, 2014).

  11. 11.

    See Tables 2.1 and 2.5 in Levy (2006) for the expansions of the program coverage and the budget.

  12. 12.

    The ENCASEH consists of socioeconomic and demographic information for each household member in the selected localities to be considered in estimating the discriminant score; the information includes family size and composition, age, use of indigenous languages, illiteracy, schooling, labor participation, household members’ occupation, presence of disabled household members, housing equipment, assets, cattle, land access, etc. The idea comes from the arguments of Sen (1992, 1995, 1997) to incorporate multi-dimensional aspects of the poverty condition to overcome the deficiency of using a single measurement (income or consumption) (Orozco et al. 1999). Studies have proved that the PROGRESA-Oportunidades’s targeting had been efficient, especially in identifying the poorest households. See Skoufias et al. (1999) and Fiszbein and Schady (2009) for further details.

  13. 13.

    The scholarship was also extended to the first and second year of primary education in 2011, but Caridad and Suárez (2013) argue that the scholarship to lower grades has no effect.

  14. 14.

    Food subsidy is also provided in cash so that the choice of food can be at each family’s discretion.

  15. 15.

    According to CONEVAL’s (2013) annual monitoring report, the program gives 430 pesos monthly per family as the food subsidy and additional 110 pesos for children aged 0 to 9 during the year 2012/13. Caridad and Suárez (2013) present detailed amount of transfers for each component.

  16. 16.

    As a consequence, a large number of empirical evaluation studies have been published by academic researchers especially during the first 10 years after the program was launched. Refer to Fiszbein and Schady (2009), Levy (2006) and Calderón Colín (2012) for the good summary of the program evaluation literature in all fields until 2006, and to Calderón Colín (2012) and Caridad and Suárez (2013) for the summary of the most recent literature.

  17. 17.

    Klasen and Waible (2013) argue in this respect that theoretical literature has developed in recent years on how to conceptualize vulnerability to poverty whereas empirical contributions have lagged behind.

References

Download references

Author information

Authors and Affiliations

  1. Tokyo University of Foreign Studies (TUFS), Fuchu, Tokyo, Japan

    Naoko Uchiyama

Authors
  1. Naoko Uchiyama
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Naoko Uchiyama .

Rights and permissions

Reprints and permissions

Copyright information

© 2017 The Author(s)

About this chapter

Cite this chapter

Uchiyama, N. (2017). Outlook of the Mexican Economy, Poverty, and Vulnerability. In: Household Vulnerability and Conditional Cash Transfers. SpringerBriefs in Economics(). Springer, Singapore. https://doi.org/10.1007/978-981-10-4103-7_1

Download citation

Publish with us

Policies and ethics

Search

Navigation