Poverty Reduction in Urban China: The Impact of Cash Transfers

The extent to which social protection programmes in general, and targeted programmes in particular, actually alleviate poverty has been a central issue in development debates for decades. The objective of this article is to contribute to the debate by empirically examining the poverty-alleviation effects of one of the largest targeted programmes in the world: the Minimum Living Standard Assistance (MLSA) or Dibao in China. Using newly available data on MLSA spending and a unique panel survey dataset covering the 1993 to 2009 period, this research investigates the impact of the MLSA on poverty alleviation. The analyses using fixed-effects and random-effects logit models and hierarchical liner models offer insights that go beyond the existing studies on the subject. Findings from the study confirm that targeted social protection programmes are an effective tool for reducing poverty.