Reducing poverty
The program is not only raising incomes
temporarily, it should help raise future pro-ductivity and earnings of the children ben-efiting. Modeling exercises find that nutri-tional supplements alone would boost life-time earnings by about 3 percent and edu-cation impacts would increase them by 8 percent. A general equilibrium analysis of
Progresa found that the welfare impact was
60 percent higher than that of the highly
distortionary food subsidies that Mexico
used previously.