Information and Participation in a Social Program

Participation in a social program, like that in clubs and other social organizations, is the result of a process in which an agent …rst learns about the requirements, bene…ts, and the likelihood of acceptance, applies for membership, and …nally is accepted or rejected. At each stage of the process, decisions made by the agent are responsive to expectations about the decisions and outcomes at the following stages. We propose a model of the participation process and estimate it using data from a social program in Mexico. We are able to distinguish empirically between information costs and other application costs, and show that self-selection due to information costs in fact contributes to targeting the program to the poorest families. JEL I38, D83 Keywords: program participation, take up, information acquisition, targeting, undercoverage, leakage Coady: International Monetary Fund, 700 19th Street NW, Washington, DC 20431 . Martinelli: CIE-ITAM, Camino Santa Teresa 930, 10700 Mexico DF, Mexico . Parker: CIDE, Carretera Mexico-Toluca No. 3655, 01210 Mexico DF, Mexico . We acknowledge …nancing from the Instituto Nacional de Salud’s (INSP) ongoing evaluation of Oportunidades. We thank Harold Alderman, Carola Alvarez, Jean-Yves Duclos, Paul Gertler, Mauricio Hernandez, John Maluccio, Ferdinando Regalia and participants at seminars in Cornell University, University of Minnesota, IFPRI, and Warwick University for comments and discussion. We also thank Iliana Yaschine, Bernardo Hernandez and Citlalli Hernandez for helpful clari…cations. The authors alone are responsible for any remaining errors.