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Di Bao : a guaranteed minimum income in urban China?

Author

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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.

Suggested Citation

  • Chen, Shaohua & Ravallion, Martin & Wang, Youjuan, 2006. "Di Bao : a guaranteed minimum income in urban China?," Policy Research Working Paper Series 3805, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3805
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    References listed on IDEAS

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    1. 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.
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    5. Coady, David P. & Grosh, Margaret & Hoddinott, John, 2002. "Targeting outcomes redux," FCND briefs 144, International Food Policy Research Institute (IFPRI).
    6. 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).
    7. Kanbur, Ravi & Keen, Michael & Tuomala, Matti, 1994. "Labor Supply and Targeting in Poverty Alleviation Programs," The World Bank Economic Review, World Bank, vol. 8(2), pages 191-211, May.
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    Cited by:

    1. LABAR, Kelly & BRESSON, Florent, 2011. "A multidimensional analysis of poverty in China from 1991 to 2006," China Economic Review, Elsevier, vol. 22(4), pages 646-668.
    2. Ge, Ting & Ngai, Steven Sek-yum, 2020. "Three pathways to promote poverty resilience: The effects of poverty on children’s educational and behavioral performance under multisystems in China," Children and Youth Services Review, Elsevier, vol. 113(C).
    3. Lena Kuhn & Stephan Brosig & Linxiu Zhang, 2016. "The Brink of Poverty: Implementation of a Social Assistance Programme in Rural China," Journal of Current Chinese Affairs - China aktuell, Institute of Asian Studies, GIGA German Institute of Global and Area Studies, Hamburg, vol. 45(1), pages 75-108.
    4. Golan, Jennifer & Sicular, Terry & Umapathi, Nithin, 2017. "Unconditional Cash Transfers in China: Who Benefits from the Rural Minimum Living Standard Guarantee (Dibao) Program?," World Development, Elsevier, vol. 93(C), pages 316-336.
    5. Lixin He & Hiroshi Sato, 2013. "Income Redistribution In Urban China By Social Security System—An Empirical Analysis Based On Annual And Lifetime Income," Contemporary Economic Policy, Western Economic Association International, vol. 31(2), pages 314-331, April.
    6. Huo, Xuan & Gao, Qin & Zhai, Fuhua & Lin, Mingang, 2020. "Effects of welfare entry and exit on adolescent mental health: Evidence from panel data in China," Social Science & Medicine, Elsevier, vol. 253(C).
    7. Ravallion, Martin & Chen, Shaohua, 2015. "Benefit incidence with incentive effects, measurement errors and latent heterogeneity: A case study for China," Journal of Public Economics, Elsevier, vol. 128(C), pages 124-132.
    8. Valerio Mendoza, Octasiano M., 2016. "Preferential policies and income inequality: Evidence from Special Economic Zones and Open Cities in China," China Economic Review, Elsevier, vol. 40(C), pages 228-240.
    9. Gustafsson, Björn Anders & Quheng, Deng, 2007. "Social Assistance Receipt and its Importance for Combating Poverty in Urban China," IZA Discussion Papers 2758, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

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