family subsidy. For that reason, Table 3 places it as a social assistance program. Also, this categorization concentrates on Familias en Acción, the main but not only program provided by Acción Social. Other social assistance programs such as Vivienda de Interes Social (Social Concern Housing program) or Banca de Oportunidades (Opportunity banking) are not included due to the difficulties of allocate a unitary benefit, which varies considerably according to specific household socioeconomic and financial circumstances that a representative worker characterization may not appropriately pick up. The representative benefit for Familias in Accion is below the lowest statutory benefit intended by the program, COP$ 15,000, but results from official disbursements data reported in SISGOB on benefits distributed and beneficiaries reached.

The individual valuation of social transfers is a widely acknowledged problem (Selowsky 1979), which is typically circumvented by equating individual benefits with costs of provision. In the case of insurance schemes, this is particularly unsatisfactory, as the realized benefits of insurance cannot be precisely anticipated and will depend, among other things, upon each person’s life-cycle and personal and family circumstances. For instance, the true benefits on an old-age social security scheme will depend on the future income flows guaranteed by the insurance scheme once the individual retires net of pre-retirement contributions and retirement deductions, if any. This certainly varies by individual. An alternative approximation to measure realized benefits is the value of insurance for the individual, captured by her reported willingness to pay for such services. To the extent that individuals take into consideration expectations of shocks and their future personal circumstances, then the approximation by willingness to pay is more appropriate than provision costs. However, it is uncertain to what extent individual responses on willingness to pay for different packages of benefits dissociate future expectations from their current situation, and more specifically, current ability to pay. When results are compared between those who do and those who do not receive the benefits about which they are being asked to value (see Table 4), different valuations are detected across workers categories. Those more able to pay also report more willingness to pay. Differences are also observed by occupation and reported capacity to choose their occupation. These results expectedly point towards a certain degree of endogeneity caused by self-selection: those who expect most benefits are those more likely to participate in formal jobs. Also, it points towards a potential correlation between ability and willingness: those with more earnings are also willing to pay more for their benefits.<sup>6</sup>

> 6 In addition to these tabulations, an econometric analysis is conducted on the significance of reported appreciation of social security (that is, how highly in a scale from 1 to 5 individuals regard several benefits) vis-à-vis labor earnings (and other controls) on ability to pay. Both the worker’s qualitative valuation of the program and income levels statistically determine (at 10%) the ability to pay for the full package across the complete sample of workers. Interestingly, this result varies by type of worker, with the strongest relationship observed among formal salaried and the weakest among informal poor workers. These results, however, must be interpreted with caution as a potential source of endogeneity is likely to exist between valuation and willingness to pay for a service.

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