Development Economics Seminar

Du 18/04/2018 de 16:30 à 18:00

salle R2-01, campus Jourdan - 48 bd Jourdan 75014 Paris

RAVALLION Martin (Georgetown University )

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

One often hears concerns that the poorest are being “left behind” by social policies and economic development. Yet standard measures of poverty may reveal nothing about whether the poorest are being lifted-up or left-behind. The paper draws on a recent approach to measuring the time-mean floor of any observed distribution containing transient effects and measurement errors. Guided by a theoretical model of the determination of that floor, the paper assesses whether social spending has reached the poorest and what role economic development has played. Both cross-country data and time-series data for the US indicate that social spending lifted the floor. Food stamps in the US raised the floor more than one would expect from a uniform (untargeted) allocation of mean spending. The opposite holds for the developing counties, 87% which do not raise the floor through social spending more than mean spending. Across countries, we observe higher pre-transfer floors when mean income is higher. An inequitable growth process created a sinking floor in the US since the mid-1990s, though the higher public sending on food stamps helped stabilize the floor in the wake of the 2008 crisis. Both data sets suggest a complementarity between social spending and economic growth in determining the gains to the poorest from social spending.

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