The existing transfer program is poorly targeted, so that many non-poor families receive transfers and many poor families do not receive benefits. The government of Ecuador is in the process of redesigning the _Bono_ , so that families in the bottom two quintiles of the nation’s wealth distribution will be added to the program roster and those in the top three quintiles will be removed. In addition, to receive transfers families with pre-school children will be required to take them for regular health center visits, and families with older children will be required to enroll them in school. The planned evaluation will focus on new entrants to the social transfer program who have pre-school but no school-age children (and so will be bound by the requirement to take pre-school children to health clinics); as a consequence, these groups where over-sampled. Of the children in the sample, 82 percent are in the bottom two quintiles of the wealth distribution; 98 percent have no school-age siblings; and none received social transfers in the six months prior to the survey. The sample therefore consists primarily of children from young, poor families.<sup>5</sup> Because of these selection criteria, our sample of families are poorer, on average, than families with young children in Ecuador as a whole, and poorer than families in the parishes included in this study. Table 1 shows means of selected characteristics for households in our sample, and for households from two other data sources: The 1999 _Encuesta de Condiciones de Vida_ (ECV), the most recent nationwide multi-purpose household survey conducted in Ecuador, and the 2001 Population Census. We selected households with at least one pre-school child in the ECV and the Census, and calculated nation-wide averages using the ECV, and averages for households in the same parishes included in our sample using the Census.<sup>6</sup> A comparison of columns 1 and 2 indicates that, relative to the national average, households in our sample tend to be worse off: They have fewer rooms, and are less likely to have access to services such as piped water and flush toilets, are more likely to have dirt floors, and are less likely to have assets like a fridge, oven, or TV. Table 1 also suggests that households in our sample are generally worse off

> 5 The sample was constructed by randomly selecting “parishes”—the smallest administrative unit in Ecuador— within six regions in Ecuador (3 coastal and 3 in the highlands).  The sample contains 1/3 urban and 2/3 rural parishes. Within parishes, we randomly selected households that had pre-school children, no school-age children, and were eligible to be new entrants to the social transfer program. These children account for 82% of the sample. To this, we added another group of households that had pre-school children and were slightly too wealthy to be eligible for the program. These children account for 18% of the sample.  A small number of the wealthier households contain school-age siblings of the focal children. Our analyses are unaffected if this group is excluded. 6 The ECV is a household survey, and has the advantage of having more detailed information than the Census. However, it is not large enough to produce reliable statistics for the sub-sample of parishes we use.

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