Productive Impacts of Selected Social Safety Net Programs in Bangladesh

Abstract

Social safety net programs (SNPs) are non-contributory transfer programs designed to support the poor and vulnerable groups within society. In Bangladesh, SNPs are crucial for combating poverty. The objective of this paper is to estimate the productive impacts of selected SNPs at the household level in Bangladesh. Using a propensity score matching method, the study identified matched comparison groups to evaluate the impact. The outcome variables examined include: (i) changes in labour allocation/employment, (ii) income-generating activities, (iii) investments in land, tools, animals, family enterprises, durable goods and housing improvements, (iv) investments in human capital, and (v) changes in coping mechanisms. The study used data from the Household Income and Expenditure Survey for the programs of (1) old age allowance (OAA), (2) allowances for the widowed, destitute and deserted women (AWDD), (3) agriculture rehabilitation (ARP), (4) stipend for primary students (SPE), (5) stipend for secondary students (SSHE). The study found that ARP is a promising means of a safety net for marginal and small farmers. It generated significant positive impacts on farm and non-farm income-generating activities, labour allocation, and investment in agricultural assets and inputs. OAA and AWDD contributed positively to some productive outcomes, but the impacts were not significant. SPE and SSHE had minimal short-term impacts on productive outcomes but hold potential for long-term benefits through human capital development. When considering all SNPs collectively, the study found significant impacts on various productive outcomes. Beneficiaries showed greater engagement in non-farm activities while reducing their involvement in farm activities. Moreover, beneficiaries earned significantly higher income from non-farm sectors compared to the farm sector. To enhance the productive impacts of SNPs, this paper suggests that policymakers should design such interventions that bring productive outcomes. This will help not only to protect but also to promote the well-being of poor and vulnerable populations.