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Eligibility thresholds for minimum living guarantee programs : international practices and implications for China

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  • Umapathi, Nithin
  • Wang, Dewen
  • O'Keefe, Philip

Abstract

Using a simple framework, this paper discusses the underlying reason of the variation of threshold level in developed countries, from the least generous 20 percent to around 60 percent of median wage, with an average of 35 percent. The generosity of minimum guarantee social assistance programs is deeply rooted in social values and principles that further underpin the policy objectives. Many Organizations for Economic Cooperation and Development (OECD) countries set their policy targets for minimum living standard programs beyond basic needs and aim to guarantee a minimum socially acceptable level for a decent living. Thresholds are also refined to reflect the differences in family size and demographic structure, difference in regional cost of living and changes in prices and local wages. In some countries the thresholds show some regional variation due to local discretionary powers of sub-national authorities to set the threshold depending on the co-financing mechanisms. These lessons are valuable for China as the Chinese government has made efforts to standardize the implementation and management of its own minimum income guarantee (Di Bao) programs. The policy recommendations for China include accelerating the convergence of localized approaches, raising the administrative level for setting thresholds to higher level, defining the roles of central and local governments in financing and management, and establishing a transparent budgetary management system to transfer and allocate social assistance funds.

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  • Umapathi, Nithin & Wang, Dewen & O'Keefe, Philip, 2013. "Eligibility thresholds for minimum living guarantee programs : international practices and implications for China," Social Protection Discussion Papers and Notes 83118, The World Bank.
  • Handle: RePEc:wbk:hdnspu:83118
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    Cited by:

    1. Nelson, Kenneth & Fritzell, Johan, 2014. "Welfare states and population health: The role of minimum income benefits for mortality," Social Science & Medicine, Elsevier, vol. 112(C), pages 63-71.

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    Keywords

    Safety Nets and Transfers; Rural Poverty Reduction; Poverty Impact Evaluation; Regional Economic Development; Services&Transfers to Poor;
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