Poverty Traps and Social Protection
36 Pages Posted: 26 Jun 2008
Date Written: February 1, 2008
This paper demonstrates that there are potentially large returns to social protection policy that stakes out a productive safety net below the vulnerable and keeps them from slipping into a poverty trap. Much of the value of the productive safety net comes from mitigating the ex ante effects of risk and crowding in additional investment. The analysis also explores the implications of different mechanisms of targeting social protection transfers. In the presence of poverty traps, modestly regressive targeting based on critical asset thresholds may have better long-run poverty reduction effects than traditional needs-based targeting.
Keywords: Poverty traps, Targeting transfers, Dynamic modeling
JEL Classification: D91, I30, O12
Suggested Citation: Suggested Citation