Socioeconomic differences in the distribution by age of public transfers in Mexico

Félix Vélez Fernández-Varela, Instituto Tecnológico Autónomo de México (ITAM)
Iván Mejía-Guevara, University of California, Berkeley

This paper reports the study of public transfers in terms of their distribution by age and the number of years of education of the the household head. The educational level is used as a reference variable to define socioeconomic status, due to the correlation of this variable with the general socioeconomic status of households, as documented extensively in the past (Székely, 1999) (Lustig and Székely, 1997). The study of public transfers by socioeconomic level is relevant because, on the one hand, taxes have effects on the purchasing power of families and; on the other hand, in-kind transfers contribute to ease the burden on the cost of important services, such as education and health. Additionally, monetary transfers serve as a support mechanism to mitigate the effects of extreme poverty and lack of opportunities for specific population groups. Two years of study are reported in this paper to evaluate policy changes taken by the Mexican Government within a period of ten years.