Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/299449 
Year of Publication: 
2024
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-1559
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
A key challenge for policymakers is how to design methods to select beneficiaries of social programs when income is volatile and the target population is dynamic. We evaluate a traditional static proxy-means test (PMT) and three policy-relevant alternatives. We use a unique panel dataset of a random sample of households in Colombia's social registry that contains information before, during, and after the 2020 economic crisis. Updating the PMT data does not improve social welfare relative to the static PMT. Relaxing the eligibility threshold reduces the exclusion error, increases the inclusion error, and increases social welfare. A dynamic method that uses data on shocks to estimate a variable component of income reduces exclusion errors and limits the expansion in coverage, increasing social welfare during the economic crisis. We consider these targeting metrics together with the curvature of governments' social welfare function and budgetary and political constraints.
Subjects: 
Social protection
Targeting
Household income
Poverty
JEL: 
I38
D31
D63
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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