Can microcredit reduce vulnerability to poverty? Evidence from rural Vietnam

Extant literature has extensively explored microcredit's impacts, confirming its essential role in poverty alleviation. However, most studies focus on poverty measures that exclusively emphasize current poverty status without adequately addressing the potential of falling into or remaining in poverty. Furthermore, the role of credit services in helping the poor in rural areas appears to be underexamined in the literature. To address this knowledge gap, this study investigates whether rural microcredit can reduce household vulnerability to poverty. A theoretical framework is developed to capture the mechanism by which microcredit borrowing has a vital role in household businesses and impacts the probability of being poor in the future. The Vietnam Access to Resources Household Survey data set from 2008 to 2016 is used to explore this issue. The findings indicate that rural Vietnam's access to microcredit significantly reduces vulnerability to poverty. Moreover, better-off households are seemingly the most effective at using microcredit, whereas the opposite is found among worse-off households. These results are found to be robust using the propensity score matching method.     

The impact of microcredit on self‐employment profits in Vietnam

This study examines the impact of microcredit on household self‐employment profits in Vietnam. For two indicators of credit participation – a dichotomous participation dummy and the accumulated amount of microcredit received per household – the analysis reveals a positive effect on household profits. The analysis also reveals that an instrumental variable method within a fixed‐effects framework can control for the possible endogeneity of credit and thereby identify the true effect of credit.     

South Africa's post-apartheid microcredit experiment: moving from state-enforced to market-enforced exploitation

The international donor community arrived in post-apartheid South Africa in the early 1990s to restructure the economy along neoliberal lines. One of the most important of the interventions it promoted was microcredit, which was widely seen as one of the principal self-help solutions to the exceptionally high levels of unemployment and poverty that prevailed in the Black South African community. In spite of an early ‘boom-to-bust’ episode in the early 2000s and worrying evidence it was actually further impoverishing far more Black South African's than it was actually helping escape from poverty and unemployment, the microcredit model did not lose its international support: if anything, this support was expanded as the international development community desperately sought to ensure the survival of the microcredit model and therefore also the centrality of self-help and individual entrepreneurship as the only way out of poverty for the poor. This article shows how and why the microcredit model was supported so strongly by the international development community and South African financial community in spite of its manifestly calamitous impact on Black South African community. Overall, I conclude, microcredit can be viewed as South Africa's own sub-prime-style disaster which, like the original US version, has mainly served to benefit a tiny financial elite working within and around the microcredit sector, whilst simultaneously destroying many of the most important pillars of the economy and society.     

Impact of remittances on male and female labor force participation patterns in Africa: Quasi‐experimental evidence from Ghana

In this paper, we examine how remittances, an outcome of labor mobility, affect labor market activities in Ghana using detailed household and individual‐level data. This is important, considering the extensive literature that has documented the remittance–poverty reduction nexus. First, we find a strong negative association between household remittance‐receiving status and individual labor supply decisions using instrumental variable estimation techniques. Second, we find the depressing effect of remittances on labor supply decisions to be much stronger in rural areas. Rural women who reside in remittance‐receiving households are less likely to be in the labor force compared with those who do not reside in such households. Remittances have very little impact on labor supply decisions in urban areas. Our findings support that remittances can exacerbate long‐term poverty reduction in rural areas through lower labor force participation, and as such rural‐based and gender‐based interventions may be needed to help redirect remittance income.     

Microfinance and gender empowerment

In this paper, we develop a theoretical model of household production, bargaining and credit to analyse how access to microcredit affects intra-household decision-making and welfare, and identify conditions under which female household members are most likely to benefit. We show that, consistent with ethnographic accounts of the impact of microcredit programmes on poor households, access to loans can lead to a variety of outcomes for intra-household decision-making and welfare depending on initial conditions and that, in some instances, women borrowers may experience a decline in welfare. We identify two instances in which a woman is most likely to benefit: when there is scope for investing the loan profitably in a joint activity, and when a large share of the household budget is devoted to household public goods.     

Poverty and Income Dynamics in Philippine Villages, 1985–2004

The authors examined the long‐term changes in household income structure and decline in poverty in three rice‐growing villages in the rural Philippines from 1985 to 2004. They found a shift of household income structure away from farm to nonfarm sources, accompanied by a decline in the incidence of poverty by about one‐half. Such a decline can be explained primarily by the rise in returns to the “quantity” attributes of human capital, measured by age composition, and, secondly, by the rise in returns to the “quality” attributes, measured by the proportion of household members completing secondary and tertiary schooling. It is clear that the poor benefited from the development of the nonfarm labor market where they were able to fully utilize their only asset, that is unskilled labor.     

Disentangling the Poverty Effects of Sectoral Output,Prices, and Policies in India

This paper attempts to disentangle the poverty effects of key policy variables that directly affect the poor (namely the government‐led channel of development spending and financing) in both agricultural and non‐agricultural sectors after accounting for the effect of respective sectoral per capita income and prices, using data from India over five decades. The paper emphasizes the sectoral composition of income and prices as mechanisms influencing the level of poverty and establishes empirically that it is the rise in non‐agricultural per capita income that reduces rural poverty via the channel of internal migration, after having controlled for the variation in key components of fiscal spending and monetary/financial policy via the availability of credit. Uneven sectoral growth pattern explains why urban poverty becomes a spill‐over of persistent rural poverty when the agricultural sector shrinks. While checking for robustness, there is evidence that the rise in non‐agricultural income alone may not reduce rural poverty, when measured in terms of rural infant mortality rate as a non‐income indicator of well‐being.     

Shocks, Policy Reforms and Pro-Poor Growth in Bolivia: A Simulation Analysis

This paper analyzes how major external shocks and policy reforms affect Bolivia’s ability to achieve pro‐poor growth. Employing a recursive‐dynamic CGE model, it considers three different scenarios: an optimistic baseline scenario; a more realistic scenario that accounts for two important negative external shocks (declining capital inflows and El Niño); and a scenario that captures the combined effect of the shocks and two major reform projects (development of the gas sector and deregulation of the urban labor market). It turns out that the shocks are likely to impair Bolivia’s medium‐term development prospects, leading to marked increases in both urban and rural poverty. If the reform projects were implemented, the poverty increase caused by the shocks would be more than offset for urban households, but reinforced for rural households.     

浅析贫困、经济增长与脱贫时间——基于中国城镇居民调查数据的分析

20世纪90年代以来，经济增长和收入分配不平等对于城镇人口脱贫时间产生了消极影响。研究发现，城镇贫困在1997年达到高峰，然后逐渐缓和；贫困人口的收入增长在初期能使脱贫时间迅速减少，但边际效果是递减的；贫困人口之间的收入分配不平等延长了脱贫时间，如果贫困人口的初始收入增加，则会明显缩短脱贫时间。     

孟加拉乡村银行模式在中国的实践

孟加拉乡村银行模式是非政府组织向穷人发放小额贷款以帮助其脱贫的金融模式.1993年,这一模式被引入到中国并试点运行,经过约10多年的试验,取得一定的经验和成效,但也出现了不少问题.本文在总结以往经验和教训的基础上,借鉴孟加拉乡村银行小额信贷模式,结合我国特殊的国情和条件,提出了使孟加拉模式顺利"中国行"的相应政策建议.     

URBAN POVERTY IN CHINA AND ITS CONTRIBUTING FACTORS, 1986–2000

Food price increases and the introduction of radical social welfare and enterprise reforms during the 1990s generated significant changes in the lives of urban households in China. During this period urban poverty increased considerably. This paper uses household level data from 1986 to 2000 to examine what determines whether households fall below the poverty line over this period and investigates how the impact of these determinants has changed through time. We find that large households and households with more nonworking members are more likely to be poor, suggesting that perhaps the change from the old implicit price subsidies, based on household size, to an explicit income subsidy, based on employment, has worsened the position of large families. Further investigation into regional poverty variation indicates that over the 1986–93 period food price increases were also a major contributing factor. Between 1994 and 2000 the worsening of the economic situation of state sector employees contributed to the poverty increase.     

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.     

Poverty Dynamics,Violent Conflict,and Convergence in Rwanda

This paper analyzes the poverty impact of the violent events that affected Rwanda in the 1990s. The main objective of the paper is to identify systematically potential mechanisms linking violent conflict with changes in poverty across provinces and households in Rwanda before and after a decade of violence. In accordance with emerging literature on the long‐term economic effects of violent conflict, we find empirical evidence for economic convergence between richer and poorer Rwandan provinces and households following the conflict shocks. Using a small but unique panel of households surveyed before and after the conflict period, we find that households whose house was destroyed or who lost land ran a higher risk of falling into poverty. We do not find much evidence for an economic effect of violent deaths at the household level due to substitution effects of labor within the household. Non‐violent deaths however seem to increase income per adult equivalent for the survivors. Results are shown to be robust to sample selection and IV models.     

Demand,Supply, and Labor Market Analysis

Our previous research argued that interest payments on consumer debt should be subtracted from household income to measure poverty. We estimated 4 million additional poor Americans in 2007, calling them "debt poor." This paper finds that the debt poor are somewhat like the poor (they are unlikely to own a home or have private health insurance), somewhat like middle-class households (race), and in-between in other ways (education levels). Debt poor households were likely middle class once, having access to considerable consumer credit; but following a loss of income, their large debt burden put their living standard below their poverty threshold.     

Patriarchy,family structure and the exploitation of women's labor

The authors present a case for including the patriarchal model into the analysis of female labor force participation in the United States. They argue that only if it is assumed that the division of labor and distribution of goods and services are structured to benefit the male head of the family can various trends be explained, including the low relative income of women compared to men, the increase in female labor force participation without a corresponding increase in household work by men, and the increasing number of divorces initiated by women despite the fact that divorce increases female poverty.     

Rural credit and the time allocation of agricultural households: The case of PRONAF in Brazil

This paper evaluates the impact of Brazil's National Program to Strengthen Family Farming (PRONAF) on the time allocation of household members. We use data from the 2014 Pesquisa Nacional por Amostra de Domicílios, and we apply propensity score methods to complex surveys recently recommended in the literature. We find that PRONAF helps to increase focus on agricultural activities, but it also stimulates female partners to engage in unpaid work. The results show significant effects of PRONAF on child labor and on the gender‐specific division of labor within households, although it does not have the usual adverse effects of rural credit programs on school attendance.     

Gender,entrepreneurship and food security in Niger

In many African countries, the income generated from the informal sector and the entrepreneurship is particularly important for reducing poverty. Previous studies have not found clear evidence on the relationship between self‐employment by gender and food security. We argue that this may be a result of the gender inequality in resource accessibility. In this paper, we analyze the implication of household entrepreneurship on food security in Niger, where gender disparities in resource accessibility are reduced. We find that owning female‐managed non‐agricultural enterprises is positively related to food accessibility and food availability within female‐headed households. The results draw the attention on reducing gender differences in resource accessibility in entrepreneurship for improving food security.     

Estimating the Income Gain of Seasonal Labor Migration

Male seasonal labor migration has become an increasing phenomenon globally and particularly for Armenia. This study finds that the monthly income gains for seasonal migrants from Armenia to Russia are about US$480 relative to only US$50 in the case of non‐migration. Individual panel data based on a novel household survey allow controlling for a variety of socio‐economic characteristics. Propensity score matching combined with difference‐in‐differences addresses potential endogenous self‐selection into migration. This paper finds negative selection based on education, employment, and pre‐migration income. This is reflected by a low premium for skills in Russia relative to Armenia, luring seasonal migrants into low‐skill jobs, mainly in the construction sector. The results identify seasonal labor migration as an attractive opportunity to escape unemployment, especially for the unskilled labor force. Therefore, seasonal migration has become an increasingly important source of income for households (through remittances) from low‐income countries and helps eradicate poverty.     

Impact of microcredit on borrowers’ expenditures: a fuzzy regression discontinuity design approach

This article uses the data from 69 villages in Bangladesh to estimate the effect of participation in microcredit programmes on household expenditures. A regression discontinuity design (RDD) is used to identify the credit effect. Our results show heterogeneous treatment effect on different types of expenditures. We show that access to credit reduces per capita expenditure on durable goods such as kitchen equipment, furniture, repair and maintenance of house and increases the expenditure on per school-going child. We also show insignificant impact of access to credit on non-durable goods and health care, recreation and gifts. Interestingly, our results indicate a positive impact of microcredit on village-level expenditures.     

新型农村社会养老保险政策效果评估——收入、贫困、消费、主观福利和劳动供给

本文使用中国健康与养老追踪调查(CHARLS)数据,采用断点回归和双重差分识别策略,估计了"新农保"对农村老年人收入、贫困、消费、主观福利和劳动供给的影响。研究结果显示,"新农保"养老金收入显著提高了农村老年人的收入水平、减少了贫困的发生、提高了其主观福利,并在一定程度上促进了家庭消费和减少了老年人劳动供给。进一步的研究显示,健康状况较差的老年人受到的政策影响更大更显著,表明"新农保"的政策影响存在异质性。