The Poverty Reduction Capacity of Private and Public Transfers in Transition

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThe transitional economies of the Former Soviet Union (FSU) have enjoyed an extraordinary period of growth and poverty reduction between 2000 and 2007 and this occurred in concomitance with significant increases in private and public transfers to households. The paper assesses the relative importance of these transfers for welfare and poverty in Moldova, the poorest country in Europe. A longitudinal analysis based on panel data reveals that private transfers and social insurance transfers are effective in improving welfare and reducing poverty whereas social assistance transfers have little or no effect. Social insurance and social assistance seem to have swapped roles. Social insurance is most relevant for lifting people out of poverty while social assistance -if anything -has a small role in protecting the non-poor from falling into poverty. We also find that the different types of transfers do not crowd-out each other and that social insurance may in fact reinforce the capacity of private transfers to reduce poverty. Such findings have several policy implications for the near future: a) Poor households in FSU transitional economies remain highly vulnerable to shocks in public and private transfers; b) the 2008-2009 recession is likely to expose this vulnerability and result in a surge in poverty larger than expected and c) the social assistance systems remain in great need of pro-poor reforms and cannot currently provide an adequate protection from economic shocks. JEL: H5, I3, O1, P2

Migrants' Remittances, Poverty and Social Protection in the South Pacific: Fiji and Tonga

“…Notable exceptions are studies with a clear poverty focus (e.g. Adams, 1989Adams, , 2006aAhlburg, 1995;Adams and Page, 2005;Verme, 2011) and a number of studies compiled by the World Bank (Ozden andSchiff, 2006, 2007). Others have addressed the important role of remittances in the reduction of consumption volatility arising from negative income shocks (Combes and Ebeke, 2011).…”

Minimum income in a transition economy

“…Milanovic (2000) found for Latvia a weak pro-poor role of social protection benefits. Verme (2010) looked at social assistance benefits in Moldova using panel data between 2001 and 2004 and found a non-significant impact on welfare. Van de Walle (2003) tested the public safety net in Vietnam and found the social safety net had a very marginal role in protecting people from poverty or promoting an exit from poverty.…”

“…Van de Walle (2003) tested the public safety net in Vietnam and found the social safety net had a very marginal role in protecting people from poverty or promoting an exit from poverty. Verme (2010) looked at social assistance benefits in Moldova using panel data between 2001 and 2004 and found a non-significant impact on welfare.…”