How effective are social safety net programs in reducing poverty risks? A comparative study of Taiwan and Southeast China

Abstract

ABSTRACT Using the harmonized Panel Study on Family Dynamics 2006, 2011, and 2013/14 data, this is the first study to examine poverty patterns and investigate the role of social safety nets in alleviating poverty over time in East Asia through a comparative lens, focusing on Taiwan and southeast (SE) China. We compared the extent to which public transfers alleviate poverty utilizing multilevel regression models. Our findings indicate that, firstly, the extent of poverty increased at a faster rate in rural areas and among migrants in SE China compared to residents in Taiwan and urban SE China, suggesting widening regional inequality. Secondly, social safety nets reduced poverty in all locations, and the reductions increased over time to a greater extent in rural areas and among migrants in SE China. However, such reductions remained insufficient to narrow the disparity in regional poverty trends. Thirdly, social safety nets in SE China lagged behind Taiwan’s on participation rates in elder, disability and education assistance and led in low-income assistance. Finally, although welfare policy design is more generous in Taiwan than SE China, our findings based on welfare outcomes indicate that Taiwan’s safety net did not alleviate poverty to a greater extent compared to SE China’s.