Escaping from poverty trap: a choice between government transfer payments and public services

Abstract

BackgroundAnti-poverty has always been an important issue to be settled. What policies should be selected to help individuals escaping from the poverty trap: by directly offering transfer payments or indirectly providing public services? This paper is among the first to explore the effects of public anti-poverty programs system in China.MethodsWe Using unbalanced panel data of China Health and Nutrition Survey (CHNS) from 1989 to 2009, we demonstrate how the individual poverty status is determined through a four-staged simultaneous model. We choose the 3SLS (Three Staged Linear Squared) methodology to do the estimation.ResultsGTPs (Government Transfer Payments) don’t have positive effects on poverty reductions. The results demonstrate that GTPs increasing by 10% makes private transfer payments decrease by 3.9%. Meanwhile, GTPs increasing by 10% makes the household income decreased by 27.1%. However, public services (such as medical insurance, health services, hygiene protection etc.) have significantly positive impacts on poverty reduction. Public services share a part of living cost of the poor, and are conducive for people to gain higher household income.ConclusionsGTPs given by governments are not effective in reducing the poverty, as a result of “crowd-out effect” and “inductive effect”. However, public services are suggested to be adopted by governments to help the poor out of the poverty trap.

Does the medical insurance system really achieved the effect of poverty alleviation for the middle-aged and elderly people in China? Characteristics of vulnerable groups and failure links

“…From 1978 to 1999, China reduced poverty at a rate of 1.5% per year. However, in the following 8 years, this rate was only approximately 0.26% [9]. In 2017,approximately 45% of poor people are impoverished due to major illness and disabilities and 260 million people in China have chronic diseases, causing approximately 70% of the disease burden [10,11].…”

Assessing the Effect of Public Transfer Payments on the Vulnerability of Health Care Poverty in Rural Households in China

“…Government public transfer payments have contributed only to the decline in poverty in rural family health care vulnerability. This may be because members of the family have different levels of demand for health care, and government transfer payments do not change accordingly to the subjective needs of the family, and therefore may lead to transfer payments that are less effective in alleviating the vulnerability of health care poverty [49]. To further measure the effectiveness of public transfer payment on rural family health care vulnerability to poverty, the income elasticity of rural households' health care needs is analyzed in the empirical evidence of series two and incorporated into the same model.…”

Does the medical insurance system really achieved the effect of poverty alleviation for the middle-aged and elderly people in China?Characteristics of vulnerable groups and failure links.

“…However, in the following eight years, this rate was only approximately 0.26%. 9 In 2017,approximately 45% of poor people are impoverished due to major illness and disabilities and 260 million people in China have chronic diseases, causing approximately 70% of the disease burden. 10,11 Additionally, the prevalence of chronic disease in the elderly is 2.9 times that of the total population.…”