Poverty Traps and the Social Protection Paradox

Munenobu Ikegami, Michael Carter, Christopher Barrett and Sarah Janzen

No 22714, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Progressively targeted cash transfers remain the dominant policy response to chronic poverty in developing countries. But are there alternative social protection policies that might have larger poverty impacts over time for the same public expenditure? To explore this question, this paper develops a dynamic stochastic model of of consumption and asset accumulation by households that confront a non-convex production technology and face missing financial markets. The model demonstrates that a hybrid social protection policy, which devotes resources to funding “state of the world contingent transfers” (SWCTs) to vulnerable, but non-poor households in the wake of negative shocks, can result in lower rates of poverty in the medium term than does a conventional cash transfer policy. We also explore the prospects for using subsidized index insurance as a way to implement SWCTs and find that an insurance-based hybrid policy can result in lower total public expenditures than a conventional cash transfer social protection program.

JEL-codes: D91 I32 O12 (search for similar items in EconPapers)
Date: 2016-10
Note: DEV
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Published as Poverty Traps and the Social Protection Paradox , Munenobu Ikegami, Michael R. Carter, Christopher B. Barrett, Sarah Janzen. in The Economics of Poverty Traps , Barrett, Carter, and Chavas. 2019

Downloads: (external link)
http://www.nber.org/papers/w22714.pdf (application/pdf)

Related works:
Chapter: Poverty Traps and the Social Protection Paradox (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:22714

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w22714

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().