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Social Assistance Receipt and its Importance for Combating Poverty in Urban China

Author

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  • Gustafsson, Björn Anders

    () (University of Gothenburg)

  • Quheng, Deng

    () (Chinese Academy of Social Sciences)

Abstract

Since the second half of the 1990s economic restructuring in urban China has led to widespread joblessness and income insecurity. The rapid expansion of the system of social assistance, Di Bao, can be understood from this perspective. Using a survey covering large parts of urban China in 2002, we investigate factors affecting receipt and how receipt affects urban poverty. Results from estimating probability models indicate that social assistance receipt is strongly linked to joblessness among household members, the household’s expenditure burden, as well as the lack of financial assets. Further, a long education of the household head and membership in the Communist Party reduces the probability of receiving social assistance while having been sent to rural China during the Cultural Revolution increases it. For some types of households, receipt of Di Bao differs greatly across cities in China. The social assistance payments appear strongly targeted to the poor. However, as the Di Bao payments typically are small and many of the urban poor are not receivers, much urban poverty remains.

Suggested Citation

  • 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).
  • Handle: RePEc:iza:izadps:dp2758
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    References listed on IDEAS

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    Cited by:

    1. Gao, Qin & Zhai, Fuhua & Garfinkel, Irwin, 2010. "How Does Public Assistance Affect Family Expenditures? The Case of Urban China," World Development, Elsevier, vol. 38(7), pages 989-1000, July.

    More about this item

    Keywords

    cultural revolution; social assistance; poverty; China;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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