| Summary: | This paper reports that the vulnerable in Mexico—people who left poverty but have not yet gained a place in the middle class—make up 30-40 percent of the population, thanks to a combination of highly unsettled, low-paid employment, living in communities with poor services, and over-exposure to often short-lived and somewhat unpredictable uninsured risks. It seems necessary to distinguish between long-term and short-term sources of vulnerability to poverty, and from a policy perspective, keeping this distinction between quasi-permanent factors and shocks remains relevant as very different measures address each problem. Policy options may include (1) expanding coverage of existing programs to encompass the highly vulnerable in a permanent way or to build mechanisms into existing safety nets so that they can expand support when needed, or (2) pushing for a more radical redesign of existing programs to address simultaneously the differentiated causes (structural and transient) to the threat of future poverty.
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