Testing Vietnam's public safety net

The paper examines the impact of Vietnam's main welfare programs on moving poor people out of poverty and protecting the non-poor from becoming poor. To explore the role that transfers played in the country's dramatic reduction of poverty in the 1990s, counterfactual consumption levels are estimated allowing for behavioral responses. The findings suggest that transfers helped only a few people escape poverty and protected even fewer from poverty. Hence, the public safety net was largely irrelevant to Vietnam's poverty reduction. A larger and better designed public safety net is crucial for the future. (C) 2004 Association for Comparative Economic Studies. Published by Elsevier Inc. All rights reserved.