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Di Bao : a guaranteed minimum income in urban China?

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  • Chen, Shaohua
  • Ravallion, Martin
  • Wang, Youjuan

Abstract

Concerns about incentives and targeting naturally arise when cash transfers are used to fight poverty. The authors address these concerns in the context of China's Di Bao program, which uses means-tested transfers to try to assure that no registered urban resident has an income below a stipulated poverty line. There is little sign in the data of poverty traps due to high benefit withdrawal rates. Targeting performance is excellent by various measures. Di Bao appears to be better targeted than any other program in the developing world. However, all but one measure of targeting performance is found to be uninformative, or even deceptive, about impacts on poverty. The authors find that the majority of the poor are not receiving help, even with a generous allowance for measurement errors. While on paper, Di Bao would eliminate urban poverty, it falls well short of that ideal in practice.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3805.

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Date of creation: 01 Jan 2006
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Handle: RePEc:wbk:wbrwps:3805

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Related research

Keywords: Services&Transfers to Poor; Poverty Monitoring&Analysis; Poverty Impact Evaluation; Inequality; Poverty Diagnostics;

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References

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  1. Jalan, Jyotsna & Ravallion, Martin, 2003. "Estimating the Benefit Incidence of an Antipoverty Program by Propensity-Score Matching," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 19-30, January.
  2. David Coady, 2004. "Targeting Outcomes Redux," World Bank Research Observer, World Bank Group, vol. 19(1), pages 61-85.
  3. Martin Ravallion & Gaurav Datt, 1995. "Is Targeting Through a Work Requirement Efficient? Some Evidence for Rural India," Monash Economics Working Papers archive-41, Monash University, Department of Economics.
  4. Kanbur, Ravi & Keen, Michael & Tuomala, Matti, 1994. "Labor Supply and Targeting in Poverty Alleviation Programs," World Bank Economic Review, World Bank Group, vol. 8(2), pages 191-211, May.
  5. Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, vol. 89(4), pages 705-727, April.
  6. Ravallion, 1999. "Monitoring targeting performance when decentralized allocation to the poor are unobserved," Policy Research Working Paper Series 2080, The World Bank.
  7. Giovanni Andrea Cornia & Frances Stewart, 1993. "Two errors of targeting," Journal of International Development, John Wiley & Sons, Ltd., vol. 5(5), pages 459-496, 09.
  8. Jenkins, Stephen, 1988. "Calculating Income Distribution Indices from Micro-Data," National Tax Journal, National Tax Association, vol. 41(1), pages 139-42, March Cit.
  9. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  10. Coady, David P. & Grosh, Margaret & Hoddinott, John, 2002. "Targeting outcomes redux," FCND discussion papers 144, International Food Policy Research Institute (IFPRI).
  11. Martin Ravallion & Emanuela Galasso & Teodoro Lazo & Ernesto Philipp, 2005. "What Can Ex-Participants Reveal about a Program’s Impact?," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
  12. Ravallion, Martin & Chen, Shaohua, 2007. "China's (uneven) progress against poverty," Journal of Development Economics, Elsevier, vol. 82(1), pages 1-42, January.
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Cited by:
  1. Gustafsson, Björn Anders & Quheng, Deng, 2007. "Social Assistance Receipt and its Importance for Combating Poverty in Urban China," IZA Discussion Papers 2758, Institute for the Study of Labor (IZA).

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