Effectiveness of the main national pro-poor targeted program in Armenia: evidence from the period 2004–2018

Abstract

ABSTRACT Using the Armenian Household Survey data for 2004–2018 this study explores the causal effect of family benefits, the country’s main poverty targeted program, on multidimensional and monetary poverty. We find that only 40% of the total fund of this targeted program reaches the severe multidimensional poor households. Our regression estimation based on bias-corrected dynamic panel data models reveals that an increase in the proportion of households receiving family benefits mostly results in a decrease in the incidence of severe multidimensional poverty. However, it has no significant effect on moderately poor households and those who are vulnerable to poverty. This program significantly benefits only those households who are poor in terms of their health expenditure. We further observe that the impact of these benefits is significant on extreme monetary poor but the effect is inconclusive on those who live below the national upper poverty line. Our findings suggest that in the current development stage of the country the targeted poverty programs should focus on enhancing capabilities and human capital development. Also, to address the social assistance coverage gap, the government needs to enhance incentive mechanisms for the main actors in the social protection system.