• Social Protection and Economic Development: Are the Poorest Being Lifted-Up or Left-Behind?

    Authors
    Martin Ravallion, Dean Jolliffe, and Juan Margitic

    ABSTRACT

    Standard measures of poverty may reveal nothing about whether the poorest of the poor are being lifted-up or left-behind, yet this is a widespread concern among policy makers and citizens. The paper assesses whether public spending on social protection benefits the poorest and hence lifts the floor, and what role economic development plays. Evidence is presented for the developing world and the US. Across developing countries, a higher mean income comes with a higher floor. The bulk of this income effect is direct rather than via higher spending on social protection. That spending generally lifts the floor though this is mainly due to social insurance; on average, social assistance adds only 1.5 cents per day to the floor. Turning to the US, the paper finds that the floor has been sinking over the last 30 years, associated with an inequitable growth process. Food stamp spending partially compensates the poorest, and helped stabilize the floor in the wake of the 2008 financial crisis. The poorest in the US gain more from food stamps than average spending on food stamps, though the program’s impact on the floor per $ spent has fallen over time.

    CITATION

    Ravallion, M., D. Jolliffe, and J. Margitic. 2018. “Social Protection and Economic Development: Are the Poorest Being Lifted-Up or Left-Behind?” NBER Working
    Paper 24665, National Bureau of Economic Research, Cambridge, MA.

    Working Papers
    ORGANIZATION