Three Essays in Resilience, Vulnerability and Inequality

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University of Alabama Libraries

Resilience/vulnerability to poverty and inequality are important issues in development economics. Chapter 1 (titled "Do Conditional Cash Transfers Create Resilience Against Poverty? Long-run Evidence From Jamaica") explores the potential for a major social protection program, Conditional Cash Transfers (CCTs), to affect a person's long-run resilience against poverty. To do this, I exploit the age-based eligibility thresholds and regional variation in exposure to the Jamaican CCT program to identify its long-run impact on resilience against poverty. The major finding of this study is that child beneficiaries of the program are 11.5 percentage points more resilient against poverty when they become adults than they would have been in the absence of the program. Overall, this study provides further justification for the expansion of programs targeting children. Resilience and vulnerability can be considered two sides of the same coin, where resilience is 1 − vulnerability. In measuring resilience in Chapter 1, quantile regression was used to characterize a person's welfare distribution. However, the standard strategy in the vulnerability literature to characterize the welfare distribution is to assume the distribution and estimate the parameters via least squares. In chapter 2 of this dissertation, titled "Robust Estimates of Vulnerability to Poverty using Quantile Estimators", I formally compare the quantile regression strategy to standard strategies. Using data from Uganda, I find that the quantile regression strategy more accurately identifies the future poor among the general population. While resilience and vulnerability relates to a person's conditional welfare distribution, another question that researchers might be interested in is how policies might interact with inequality in the unconditional distribution of wealth and poverty. For Chapter 3, co-authored with Li Zhang and Cary Deck and titled "An Examination of the Effect of Inequality on Lotteries for Funding Public Goods", we experimentally study the impact of inequality on the effectiveness of contests for funding public goods in a development context. We found that increased inequality should increase total contributions to a lottery funded public good. This result differs from prior results for the standard voluntary contribution mechanism where increased inequality has been found to reduce public good provision.

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