Poverty Traps and Social Protection - Cornell University.pdfVIP

A Model of Asset Accumulation Growth and Poverty in the Absence of Social Protection Alternative Social Protection Regimes Unanticipated Social Relief Anticipated Systematic Social Protection Conclusions Poverty Traps and Social Protection Christopher B. Barrett Michael R. Carter Munenobu Ikegami Cornell University and University of Wisconsin-Madison September 2007 Barrett, Carter and Ikegami Poverty Traps and Social Protection A Model of Asset Accumulation Growth and Poverty in the Absence of Social Protection Alternative Social Protection Regimes Unanticipated Social Relief Anticipated Systematic Social Protection Conclusions Introduction 1 Multiple equilibrium poverty traps command attention: Moral urgency of chronic poverty ëUnnecssaryídeprivation; foregone potential Economically costly 2 Implications of poverty traps for social protection policies? 3 Explore this question with dynamic programing model of agents with heterogeneous ability Not all agents subject to poverty traps Risk Shocks especially pernicious, increasing unnecessary poverty 4 Conduct policy simulations: Unanticipated relief programs: Needs- vs. threshold-based Systematic (anticipated) social protection: Harnessing dynamic moral hazard Barrett,