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Social assistance and poverty reduction in Moldova, 2001-2004 an impact evaluation

  • Verme, Paolo

This paper assesses the impact of social assistance benefits on household welfare in Moldova. Ignoring standard issues of impact evaluations such as selection bias, behavioral responses, unobserved heterogeneity and endogeneity, an incidence analysis suggests that increased spending on social assistance enhances the probability of moving out of poverty and reduces the probability of moving into poverty. However, double difference estimates (based on a mimicked randomized experiment) and parametric estimates (based on panel data) indicate that social benefits have not contributed to improve household welfare or reduce poverty. Double difference estimates point to a negativeimpact on welfare. Parametric estimates do not yield any consistent significant impact on welfare or poverty. The author concludes that the growth in population coverage and expenditure on cash benefits that characterized social assistance policies in recent years has not resulted in a significant improvement in welfare, all other factors being equal.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4658.

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Date of creation: 01 Jun 2008
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Handle: RePEc:wbk:wbrwps:4658
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  1. Okrasa, Wlodzimierz, 1999. "Who avoids and who escapes from poverty during transition? - evidence from Polish panel data, 1993-96," Policy Research Working Paper Series 2218, The World Bank.
  2. Michael Lokshin & Martin Ravallion, 2000. "Welfare Impacts of the 1998 Financial Crisis in Russia and the Response of the Public Safety Net," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(2), pages 269-295, July.
  3. Alberto Abadie & David Drukker & Jane Leber Herr & Guido W. Imbens, 2004. "Implementing matching estimators for average treatment effects in Stata," Stata Journal, StataCorp LP, vol. 4(3), pages 290-311, September.
  4. van de Walle, Dominique, 2004. "Testing Vietnam's public safety net," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 661-679, December.
  5. Alberto Abadie & Guido W. Imbens, 2002. "Simple and Bias-Corrected Matching Estimators for Average Treatment Effects," NBER Technical Working Papers 0283, National Bureau of Economic Research, Inc.
  6. Milanovic, Branko, 2000. "Social transfers and social assistance - an empirical analysis using Latvian household survey data," Policy Research Working Paper Series 2328, The World Bank.
  7. World Bank, 2004. "Recession, Recovery and Poverty in Moldova," World Bank Other Operational Studies 14424, The World Bank.
  8. Lokshin, Michael & Yemtsov, Ruslan, 2003. "Evaluating the impact of infrastructure rehabilitation projects on household welfare in rural Georgia," Policy Research Working Paper Series 3155, The World Bank.
  9. Okrasa,Wlodzimierz, 1999. "The dynamics of poverty and the effectiveness of Poland's safety net (1993-96)," Policy Research Working Paper Series 2221, The World Bank.
  10. Barbara Sianesi, 2001. "Propensity score matching," United Kingdom Stata Users' Group Meetings 2001 12, Stata Users Group, revised 23 Aug 2001.
  11. Edwin Leuven & Barbara Sianesi, 2003. "PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing," Statistical Software Components S432001, Boston College Department of Economics, revised 19 Jan 2015.
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