ANTI-POVERTY EFFECTIVENESS OF THE MINIMUM LIVING STANDARD ASSISTANCE POLICY IN URBAN CHINA

Since its inception 15 years ago, the Minimum Living Standard Assistance (MLSA) has served as a last resort for China's urban poor. Using national household survey data, this study provides updated evidence on the participation rate, receipt amount, and anti-poverty effectiveness of MLSA. Families eligible for MLSA make up 2.3 percent of the urban population, but only about half of them are actual beneficiaries. City MLSA generosity and household entitled benefit amount both positively correlate with participation rate and household receipt amount. MLSA lowers the poverty rate somewhat, but substantially reduces the poverty gap and severity for its eligible participants. Nevertheless, the poverty reduction role of MLSA is restricted by its partial coverage and delivery. Consequentially, poverty remains a serious problem for MLSA's target population. The anti-poverty effectiveness of MLSA can be strengthened by full coverage and delivery of benefits and by paying special attention to disadvantaged subgroups.