Unconditional Cash Transfers in China : Who Benefits from the Rural Minimum Living Standard Guarantee (Dibao) Program?

This paper analyzes China’s rural minimum living standard guarantee (dibao) program, one of the largest minimum income cash transfer schemes in the world, and examines possible changes to the program design. Despite its size and central position in China’s current poverty reduction strategy, little...

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Main Authors:	Golan, Jennifer, Sicular, Terry, Umapathi, Nithin
Format:	Journal Article
Published:	Elsevier 2018
Subjects:	CASH TRANSFERS TARGETING RURAL POVERTY UNCONDITIONAL CASH TRANSFERS LIVING STANDARDS DIBAO
Online Access:	http://hdl.handle.net/10986/29226

id	okr-10986-29226
recordtype	oai_dc
spelling	okr-10986-292262021-05-25T10:54:43Z Unconditional Cash Transfers in China : Who Benefits from the Rural Minimum Living Standard Guarantee (Dibao) Program? Golan, Jennifer Sicular, Terry Umapathi, Nithin CASH TRANSFERS TARGETING RURAL POVERTY UNCONDITIONAL CASH TRANSFERS LIVING STANDARDS DIBAO This paper analyzes China’s rural minimum living standard guarantee (dibao) program, one of the largest minimum income cash transfer schemes in the world, and examines possible changes to the program design. Despite its size and central position in China’s current poverty reduction strategy, little is known about the rural dibao program’s performance and targeting effectiveness. Our analysis uses annual household survey data from the China Household Income Project matched with published administrative data for the years 2007–09. We find that the program provides sufficient income to poor beneficiaries but does not substantially reduce the overall level of poverty. Conventional targeting analysis reveals large inclusionary and exclusionary targeting errors; propensity score targeting analysis yields smaller but still large targeting errors. Simulations of possible changes to the program design reveal that expanding coverage can potentially yield greater poverty reduction than increasing transfer amounts. Replacing locally diverse dibao lines and transfer amounts with a nationally uniform dibao threshold and transfer could in theory reduce poverty further, but the potential gains are modest without improvements in targeting. This paper makes several contributions. To our knowledge this is the first household-level empirical analysis of China’s dibao program in rural areas, so the findings provide new, policy-relevant information. Moreover, the literature has not settled the question of whether such programs should be centralized or decentralized. We show that in practice the potential gains of centralizing the eligibility rule and transfer amount are conditional on the efficiency of targeting. By varying the program’s key design parameters our analysis also yields insights into alternative policy recommendations to improve the program performance. 2018-01-23T20:36:47Z 2018-01-23T20:36:47Z 2017-05 Journal Article World Development 0305-750X http://hdl.handle.net/10986/29226 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Elsevier Publications & Research :: Journal Article Publications & Research East Asia and Pacific China
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	CASH TRANSFERS TARGETING RURAL POVERTY UNCONDITIONAL CASH TRANSFERS LIVING STANDARDS DIBAO
spellingShingle	CASH TRANSFERS TARGETING RURAL POVERTY UNCONDITIONAL CASH TRANSFERS LIVING STANDARDS DIBAO Golan, Jennifer Sicular, Terry Umapathi, Nithin Unconditional Cash Transfers in China : Who Benefits from the Rural Minimum Living Standard Guarantee (Dibao) Program?
geographic_facet	East Asia and Pacific China
description	This paper analyzes China’s rural minimum living standard guarantee (dibao) program, one of the largest minimum income cash transfer schemes in the world, and examines possible changes to the program design. Despite its size and central position in China’s current poverty reduction strategy, little is known about the rural dibao program’s performance and targeting effectiveness. Our analysis uses annual household survey data from the China Household Income Project matched with published administrative data for the years 2007–09. We find that the program provides sufficient income to poor beneficiaries but does not substantially reduce the overall level of poverty. Conventional targeting analysis reveals large inclusionary and exclusionary targeting errors; propensity score targeting analysis yields smaller but still large targeting errors. Simulations of possible changes to the program design reveal that expanding coverage can potentially yield greater poverty reduction than increasing transfer amounts. Replacing locally diverse dibao lines and transfer amounts with a nationally uniform dibao threshold and transfer could in theory reduce poverty further, but the potential gains are modest without improvements in targeting. This paper makes several contributions. To our knowledge this is the first household-level empirical analysis of China’s dibao program in rural areas, so the findings provide new, policy-relevant information. Moreover, the literature has not settled the question of whether such programs should be centralized or decentralized. We show that in practice the potential gains of centralizing the eligibility rule and transfer amount are conditional on the efficiency of targeting. By varying the program’s key design parameters our analysis also yields insights into alternative policy recommendations to improve the program performance.
format	Journal Article
author	Golan, Jennifer Sicular, Terry Umapathi, Nithin
author_facet	Golan, Jennifer Sicular, Terry Umapathi, Nithin
author_sort	Golan, Jennifer
title	Unconditional Cash Transfers in China : Who Benefits from the Rural Minimum Living Standard Guarantee (Dibao) Program?
title_short	Unconditional Cash Transfers in China : Who Benefits from the Rural Minimum Living Standard Guarantee (Dibao) Program?
title_full	Unconditional Cash Transfers in China : Who Benefits from the Rural Minimum Living Standard Guarantee (Dibao) Program?
title_fullStr	Unconditional Cash Transfers in China : Who Benefits from the Rural Minimum Living Standard Guarantee (Dibao) Program?
title_full_unstemmed	Unconditional Cash Transfers in China : Who Benefits from the Rural Minimum Living Standard Guarantee (Dibao) Program?
title_sort	unconditional cash transfers in china : who benefits from the rural minimum living standard guarantee (dibao) program?
publisher	Elsevier
publishDate	2018
url	http://hdl.handle.net/10986/29226
_version_	1764468811027709952

Unconditional Cash Transfers in China : Who Benefits from the Rural Minimum Living Standard Guarantee (Dibao) Program?

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