In-Kind Transfers As Safety Nets for the Poor: Do they Expand or Contract during Economic Shocks? Evidence from India

105 Pages Posted: 12 Feb 2019

See all articles by Jefferson Kaduvinal Abraham

Jefferson Kaduvinal Abraham

London Business School

Yakshup Chopra

Washington University in St. Louis; affiliation not provided to SSRN

Prasanna L. Tantri

Indian School of Business

Date Written: October 11, 2017

Abstract

We compare an in-kind subsidy, a workfare program, and an unconditional cash transfer in India based on the sensitivity of the insurance provided by each program against local economic shocks. We find that transfers under the in-kind subsidy contract when the beneficiaries are faced with local economic shocks and expand during economically good times. Benefits from unconditional cash transfers and workfare benefits are unrelated to local economic shocks. We measure economic shocks using two independent measures: abnormal local temperature and abnormal bank loan defaults, and obtain similar results. We use bank transactions data for measuring the subsidies.

Suggested Citation

Abraham, Jefferson Kaduvinal and Chopra, Yakshup and Tantri, Prasanna L., In-Kind Transfers As Safety Nets for the Poor: Do they Expand or Contract during Economic Shocks? Evidence from India (October 11, 2017). Indian School of Business , Available at SSRN: https://ssrn.com/abstract=3327302 or http://dx.doi.org/10.2139/ssrn.3327302

Jefferson Kaduvinal Abraham (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, NW1 4SA
United Kingdom

Yakshup Chopra

Washington University in St. Louis ( email )

St. Louis, MO
United States

affiliation not provided to SSRN

Prasanna L. Tantri

Indian School of Business ( email )

Hyderabad, Gachibowli 500 032
India
9160099959 (Phone)

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