Do cash transfers help the poor during trade liberalization? Evidence from Laos

Abstract

Our objective is to assess the impact of trade liberalization and cash transfer programs on poverty and income distribution in Laos.We use the computable general equilibrium model and micro-simulation to assess the impact of transfer programs during trade liberalization.The results of this study indicate that cash transfers reduce poverty and narrow income inequality during trade liberalization. Policy-makers should promote development and implementation of cash transfer in Laos in order to protect poor people from the external shocks such the impact of trade liberalization. This finding might have significant impact on promotion of cash transfer programs in order to reduce poverty and income inequality.This is the first paper to investingate the impact of a cash transfer program on poverty in Laos during trade liberalization.