Abstract: We adopt the data of China’s Urban Employment and Social Protection Survey 2010 (CULS3) and evaluate the dibao program in China by RD method and matching method. According to our analysis, we got some conclusions: firstly, dibao program has limited effects on alleviating poverty based on our data. It may due to dibao program’s mistargeting. Secondly, healthy condition and living condition of a household are the factors affecting dibao program’s targeting. Thirdly, the dibao program may change the expenditure behavior of a household, however, dibao subsidy may reduce food expenditure rate of a poor household. Therefore, Chinese government ought to provide food coupon not merely cash transfer to the poorest household to avoid food shortage.
Keywords: Urban dibao program; Targeting efficient; Poor household; Food Expenditure
I Introduction
The “Minimum Livelihood Guarantee Scheme”—popularly known as Dibao (DB) — has been the Government of China's main response to the challenges of social protection in its rapidly changing economy. This paper describes the current urban poverty situation of six cities in China, examines the factors affecting the probability of a household being in poverty and investigates how the dibao program helps poor people to get out of poverty. The targeting efficiency of the urban dibao program is discussed and we also analysis the affecting factors on dibao targeting. The data used in this study from China’s Urban Employment and Social Protection Survey 2010. The cities include Shanghai, Wuhan, Shenyang, Fuzhou, Xian and Guangzhou.
In 1999, the dibao program was established in China. According to the regulations of this program, people whose per capita household income falls below a locally determined minimum living standard can enjoy this assistance whether or not he or she receives a basic living subsidy, unemployment insurance or any other insurance. Local governments determine their own minimum living standard by reference to the basic living costs. Every urban resident whose per capita household income falls below the local minimum living standard can apply for this assistance. The assistance that a household receives equals household size times the gap between per capital household income and minimum living standard (Wang, 2007).
We are very interested in the following issues: Does the urban dibao program really help the urban poor to escape from poverty? How efficient is the targeting of the urban dibao program?
What the factors influence on the efficient of dibao targeting? And the effect of dibao program on poor household expenditure? The rest of the paper is organized as follows. In Section II, poverty rates of households are estimated before and after the dibao program in six cities, so we can analysis the role of the urban dibao program in alleviating poverty; Section III shows the targeting outcomes of dibao program. In Section IV, we analysis the dibao targeting efficient, and the factors affects the targeting efficient. In Section V, we evaluate the effects of dibao cash transfer on poor household consumption. In section VI, we evaluate the effects of dibao program on food expenditure of poor household. In section VII, the conclusion and some policy suggestions are outlined.
