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

49 Pages Posted: 4 Jun 2018 Last revised: 25 May 2023

See all articles by Martin Ravallion

Martin Ravallion

Georgetown University

Dean Jolliffe

World Bank, DECDG; IZA Institute of Labor Economics; Global Labor Organization (GLO); Johns Hopkins University, Paul H. Nitze School of Advanced International Studies (SAIS), Students

Juan Margitic

Georgetown University - Department of Economics

Date Written: May 2018

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.

Suggested Citation

Ravallion, Martin and Jolliffe, Dean and Margitic, Juan, Social Protection and Economic Development: Are the Poorest Being Lifted-Up or Left-Behind? (May 2018). NBER Working Paper No. w24665, Available at SSRN: https://ssrn.com/abstract=3190000

Martin Ravallion (Contact Author)

Georgetown University ( email )

Washington, DC 20057
United States

Dean Jolliffe

World Bank, DECDG ( email )

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Washington, DC 20433
United States

HOME PAGE: http://www.deanjolliffe.net

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/en/webcontent/index_html

Global Labor Organization (GLO) ( email )

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HOME PAGE: http://https://glabor.org/

Johns Hopkins University, Paul H. Nitze School of Advanced International Studies (SAIS), Students ( email )

1740 Massachusetts Avenue, NW
Washington, DC 20036-1984
United States

Juan Margitic

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States

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