This paper analyzes the correlation between the expansion of the Mexican Conditional Cash Transfer program Oportunidades and the evolution of the labor market over the period 2000-10. We find no evidence of perverse effects. Program expansion was not associated with drops in either labor force participation or wageformality. On the contrary, the expansion of Oportunidades was strongly correlated with a transition from informal wage employment to self-employment for men (by 1.6% and 0.6% of total employment in rural and urban municipalities respectively).

This technical note analyzes the evolution of Latin American and Caribbean systems in three stages: early development of basic services (Stage One) and advancing coverage, efficiency and services (Stage Two). It proposes a direction for the future (a hypothetical Stage Three), demonstrating how some advanced Stage Two countries (Brazil, Mexico, and Chile, for example) are beginning to take steps in this direction. A set of operational priorities and monitoring and evaluation indicators is developed for each stage.