Poverty Alleviation and Interhousehold Transfers: Evidence from BRAC’s Graduation Program in Bangladesh

Poor households often rely on transfers from their social networks for consumption smoothing, yet there is limited evidence on how antipoverty programs affect informal transfers. This paper exploits the randomized rollout of BRAC’s ultra-poor graduation program in Bangladesh and panel data covering over 21,000 households over seven years to study the program’s effects on interhousehold transfers. The program crowds out informal transfers received by the targeted households, but this is driven mainly by outside-village transfers. Treated ultra-poor households become more likely to both give and receive transfers to/from wealthier households within their village; and less likely to receive transfers from their employers. As a result, the reciprocity of their within-village transfers increases. The findings imply that, within rural communities, there is positive assortative matching by socio-economic status. A reduction in poverty enables households to engage more in reciprocal transfer arrangements and lowers the interlinkage of their labor with informal insurance.

Redistributional Policy in Rich Countries: Institutions and Impacts in Nonelderly Households

We review research on institutions of redistribution operating in high-income countries. Focusing on the nonelderly, we invoke the concept of the household income package, which includes income from labor, from related households, and from the state. Accordingly, we assess three institutional arenas: predistribution (rules and regulations that govern paid work), private redistribution (interhousehold transfers), and conventional public redistribution (operating via cash transfers and direct taxes). In each arena, we assess underlying policy logics, identify current policy controversies, summarize contemporary cross-national policy variation, and synthesize existing findings on policy effects. Our assessment of redistributional effects focuses on three core socioeconomic outcomes: low pay, child poverty, and income inequality. We close by assessing how the three institutional arenas perform collectively and by calling for further work on how these institutions change over time and how they affect subgroups differentially.