Social protection and multidimensional poverty: Lessons from Ethiopia, India and Peru

Abstract

• We investigate the impact of three large-scale social-protection schemes in Ethiopia, India, and Peru on multidimensional poverty. • We employ a difference-in-differences strategy to produce estimates that deal with non-random program assignment. • We find a significant decline in multidimensional poverty incidence and intensity, particularly for the severely poor. • We also find a positive sustained impact on asset formation, livestock holding, and some living standard indicators. • The effects of the social programs mainly emanate from the direct income effect of benefits irrespective of their design. We investigate the impact of three large-scale social-protection schemes in Ethiopia, India, and Peru on multidimensional poverty. Using data from the Young Lives cohort study, we show the trend, changes and evolution of multidimensional poverty for individuals in program participant households. We follow a number of strategies to produce estimates that deal with non-random program placement. Our findings show that both the incidence and intensity of multidimensional poverty declined in all three countries over the period 2006–2016, more so for program participants than non-participants. We find positive short-term impact on asset formation, livestock holding, and some living standard indicators. In all three countries these positive impacts are sustained even in the medium and longer-term.